Meera's father left her two hundred shares of an old textile company when he passed away, bought decades ago at a price so small it barely shows up as a rounding error next to today's numbers. The company has not done much of anything in fifteen years. Revenue is flat. The stock barely moves except to drift slowly downward. Meera knows all of this. She reads the annual reports out of habit, more than hope. When her financial advisor gently suggested she sell and redirect the money into something with an actual growth story, Meera hesitated, then said something that surprised even her. It just feels wrong to sell it. If Meera did not already own these shares today, and someone offered to sell her two hundred shares of this same company at its current price, she would say no without a second thought. Yet selling the shares she already owns feels like a betrayal of something, though she struggles to explain of what exactly.
A family may have no plans to return to their ancestral home, no strong expectation that its value will rise much further, and no practical use for the property. Yet the thought of selling it somehow feels wrong. Someone selling a used car often believes it deserves a higher price than buyers are willing to pay. An old phone, a favourite watch, or a piece of furniture that has been around for years somehow feels more valuable simply because it is already ours.
Most people assume that an asset's worth to them should depend only on the asset itself, its future prospects, its risk, its place in a portfolio, and nothing else. Ownership, in this view, is simply a neutral fact, a line item on a demat statement, carrying no weight of its own. Whether Meera bought these shares herself yesterday or inherited them from her father twenty years ago should not, in theory, change what those shares are actually worth to her today. This feels like the obviously rational way to think about money. It also turns out to be quite far from how the human mind actually behaves.
The Mugs Nobody Wanted to Sell
In 1980, the economist Richard Thaler published a paper called "Toward a Positive Theory of Consumer Choice," in which he catalogued a set of everyday financial behaviours that standard economic theory could not explain, and gave one of them a name that has stuck ever since, the endowment effect. A decade later, Thaler teamed up with Daniel Kahneman and Jack Knetsch to test this idea properly, in an experiment that has since become one of the most cited studies in behavioural economics. They gave half a group of Cornell University students a coffee mug bearing the university's logo, and left the other half empty-handed. Then they asked the mug owners the lowest price at which they would sell their mug, and asked the mug-less students the highest price they would pay to buy one. If ownership truly did not matter, both groups should have arrived at roughly similar numbers. They did not. The students who already owned a mug refused to sell for less than about $5.25 on average, while the students without a mug were only willing to pay somewhere between $2.25 and $2.75 for the identical item. Simply owning the object, even for a few minutes inside a classroom experiment, had already made it feel worth roughly double what it was worth to someone who did not own it. This work eventually formed part of the body of research that earned Thaler the Nobel Memorial Prize in Economic Sciences in 2017.
Why Owning Something Changes What It Is Worth
The explanation Thaler, Kahneman, and their colleagues gave for this pattern connects directly back to loss aversion, the same idea explored in an earlier piece on this blog about why losing money hurts roughly twice as much as gaining the same amount feels good. The moment an object becomes yours, it stops being a potential gain sitting out there in the world, and becomes your new reference point, the thing measured against zero. Giving it up from that point onward is no longer neutral. It registers in the mind as a loss, and losses are felt far more sharply than equivalent gains. This is why Meera can look honestly at those textile shares, recognise that she would never choose to buy them fresh today, and still feel a genuine, specific reluctance to let them go. The reluctance is not really about the shares' future prospects at all. It is about what parting with something already possessed does to the mind, regardless of what that something actually is.
A Simple Test to See the Bias in Yourself
There is a useful, almost embarrassingly simple test hiding inside this research, and it applies directly to any inherited or long-held investment. Look at whatever is sitting quietly in a portfolio, and ask one honest question. If this were not already mine, and I had today's full amount of cash in hand instead, would I choose to buy this exact holding, at this exact price, right now. If the answer is a clear yes, the holding earns its place on genuine merit, and the fact that it happened to arrive through inheritance is beside the point. If the answer is no, or even a hesitant maybe, then whatever is keeping that holding in the portfolio is very likely the endowment effect at work, not a real investment thesis. The test is uncomfortable precisely because it strips away the story around the asset, the memory of who gave it, the sense of loyalty attached to it, and leaves only the question that should have mattered from the start.
The Indian Context
This particular blind spot shows up with unusual force in Indian households, where shares are often passed down through generations, sometimes as physical certificates from decades ago, sometimes quietly forgotten inside old files after a parent or grandparent has passed away. The scale of this neglect is visible in the country's own numbers. As of March 2023, nearly 117 crore shares had been transferred to the Investor Education and Protection Fund (IEPF), the government body that holds shares and dividends left unclaimed for seven consecutive years. Industry estimates place the value of these holdings at around ₹40,000–50,000 crore. A meaningful share of this comes not from active neglect but from exactly the emotional pattern described here, families who inherited old certificates, felt too attached or too uncertain to act on them, and simply let them sit, sometimes for so long that the shares were eventually swept away by the very rule meant to protect them. The endowment effect, in these cases, does not just prevent a rational sale. It can end in the family losing active control of the asset entirely, at least until someone eventually files the paperwork to reclaim it.
Where the Caution Belongs
None of this is an argument that every inherited investment should be sold on principle, or that attachment to a family holding is always irrational. There are perfectly sound reasons to keep an inherited holding exactly as it is, including genuine confidence in the company's prospects, tax considerations around long-held capital gains, or simply the practical cost and effort of unwinding an old physical certificate. The point is not that holding on is always wrong. The point is that the decision deserves to be made on the holding's actual merit today, examined with the same clear eyes a person would use before buying it fresh, rather than being quietly protected from that scrutiny simply because it already sits in the portfolio and carries someone else's memory attached to it.
The Money Vichara Reflection
Meera does not have to sell her father's shares to honour his memory, and she does not have to keep them either. What she owes herself is an honest answer to one plain question, asked without any sentiment attached to it at all. Would she buy this today, at this price, if it were not already hers. Whatever memory the shares carry can live on perfectly well in a photograph, or a story told at a family gathering, without needing a struggling stock certificate to carry it for her.
That is the real vichara.
This blog shares personal opinions for educational purposes only. The author is not registered with SEBI. This is not financial advice. © 2026 Money Vichara.
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