If you’re anything like me, it’s impossible not to get drawn into the Olympics. You watch all of these young athletes who have dedicated their entire lives to a single moment sacrificing time, comfort, opportunities, and sometimes their own bodies just for a chance to compete on the world’s biggest stage. In truth, many of them have already “won” simply by making it there, podium finish or not.

That’s why I can completely understand why someone like Lindsey Vonn chose to race her downhill event despite rupturing her ACL only weeks earlier, sadly resulting in a crash and a serious leg fracture. After years of training, countless hours of preparation, and the possibility that this could be her final Olympic appearance, walking away must have felt unthinkable, especially with the race so close. Yet if we strip away the emotion of the Olympics, we have to ask: would she have taken the same risk if it were any other event?

Her decision brings to mind the countless climbers who have perished on Mount Everest with the summit finally in sight. They push forward despite storms rolling in, dwindling daylight or explicit warnings from their guides. Why? Because the closer we get to a long‑pursued goal, the harder it becomes to turn back, even when, deep down inside, we know it’s the right choice.

When we’ve invested years of effort, enormous resources or pieces of our identity into something, stepping away doesn’t feel like strategy, it feels like outright betrayal. And it’s in these moments when emotion overrides judgment that very bad things tend to happen.

Sunk costs turn smart investors into reckless ones

The sunk‑cost fallacy is the belief that because we’ve already invested heavily in time, money or reputation we must keep going to justify what we’ve already spent. But markets don’t care about our past effort, they only care about present value and future risk. Yet emotionally, we behave as though quitting means our sacrifices were meaningless. So instead of cutting losses or reassessing, we double down at exactly the wrong time.

This shows up in averaging down on losing positions, telling ourselves: “I can’t sell now — it’ll bounce back;” “I’ve held it this long, I might as well keep going;” “I can’t be wrong … not after everything I put into this.”

A simple test often breaks the spell: If this were a new investment today, with fresh eyes, would I buy it?

The seduction of being ‘so close’ to a big win

This is FOMO in its most distilled form. When investors believe they’re on the cusp of a massive payoff, whether it was

AI

in 2026, crypto in 2021, cannabis in 2018 or tech stocks in 1999, the reward starts to feel almost inevitable. The fact that everyone around them seems to be making easy money only intensifies the pull. Herd behaviour creates a false sense of safety just as risk peaks.

This is why bubbles accelerate at the end, not at the beginning. Investors don’t take reckless risks when assets are cheap and fear dominates, they take them when valuations are stretched, liquidity is evaporating and markets are offering their final euphoric burst. The feeling of being “so close” overwhelms discipline, and judgment collapses.

Ego and identity fusion: ‘This is who I am now’

For many investors, their strategy becomes part of their identity. I’ve seen this with

Tesla Inc.

and

Apple Inc.

investors who praise the companies endlessly and own every product they make because at some point it became less about valuation and more about belonging.

Zooming out, momentum traders don’t want to become cautious. Value investors don’t want to admit a value trap. Founders can’t abandon the businesses they built. Portfolio managers don’t want to look wrong in front of peers.

When identity fuses with outcome, rational decision‑making collapses. But markets don’t care about your ego, your beliefs or your worldview. They reward adaptability, not loyalty.

To break free from the pressures of sunk costs, the fear of looking wrong and the seductive pull of an imminent payoff, I lean on the ancient spiritual Hermetic principle: “As within, so without.”

If your internal world is calm, grounded, and honest, your external decisions tend to follow the same pattern. Suddenly, turning back from a dangerous climb or stepping out of a risky investment no longer feels like defeat. It becomes alignment. You stop acting from fear or ego and start acting from clarity. That’s the moment when good judgment returns.

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In investing, that clarity shows up as disciplined attention to fundamentals, valuation, balance‑sheet strength and the real risks posed by disruption and rapidly changing conditions. It is the ability to admit that the upside no longer compensates for the downside, even when the narrative remains seductive and the finish line appears close.

And in investing, as in life, true skill is not found only in reaching the summit or pushing for one last burst of speed but in having the wisdom to walk away when the cost of continuing becomes too high.

Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc., operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning. The opinions expressed are not necessarily those of Wellington-Altus.

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