Identifying Behavioral Bias in Client Decisions

Seema, a private wealth manager, has been working with a client, Richard, who has a tendency to panic during market downturns. Richard often reacts by selling his investments at the worst possible time due to a fear of losing money. Seema has noticed that Richard’s behavior is influenced by news headlines and market volatility, which cause him to second-guess his long-term investment strategy. To help Richard stay focused on his financial goals, Seema is considering a behavioral coaching strategy to mitigate the impact of emotional decision-making.

Which of the following behavioral biases is Richard primarily displaying in his investment decisions?