An introduction to the concept of investor utility, including techniques for responding to bear markets.

What makes an investor satisfied with their portfolio performance results? Is it high returns, consistent returns, or returns that meet investment needs? How does satisfaction change if an investor experiences the vicissitudes of a bear market? The article investigates the connection between investor psychology and wealth, and addresses whether investors should change strategies based on changing market conditions. Finally, the article reviews the performance of professional investors in turbulent market conditions.

Download Was the Pain of the Loss Greater than the Pleasure of the Gain?

This article was originally developed for the Investment Quarterly for the third quarter of 1998 (following a brief, but sharp, global bear market).