Of course, this won’t protect you from the possibility of losing money on an investment. And Mayr says it’s important that people not rely too much on wishful thinking: “If traders come to habitually ignore losses through cognitive reinterpretation, they may miss the signals that indicate trouble ahead as a bull market starts to shift to a bear market.”

Historically, however, people who are aggressive and take risks with their investments do tend to be more successful in the long run. At the very least, says Phelps, this strategy may help people debating a decision—financial or otherwise—get off the fence and take the plunge.

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