Investing is supposed to be about logic: you assess risk, track performance, and make data-driven decisions. But for many people, emotion—not evidence—guides their financial choices. That’s why even when an investment is clearly underperforming, people cling to it.
Why? Because it’s personal. Because they’ve already sunk so much time, hope, and money into it. Because walking away would feel like failure.
But here’s the hard truth: holding onto a bad investment doesn’t make it better. It just delays the inevitable—and often deepens the financial loss. Let’s explore 10 common poor-performing investments people refuse to walk away from and the psychology that keeps them stuck.
1. Timeshares
Timeshares are often marketed as affordable luxury. But they’re rarely as flexible or financially wise as they sound.
Owners face ongoing maintenance fees, limited booking windows, and restrictive resale markets. Worse, the value rarely appreciates—in fact, many timeshares are nearly impossible to sell without a loss.
Still, people hold onto them out of guilt, obligation, or hope that they’ll “start using it more next year.” That year rarely comes.
2. Failing Rental Properties
Rental real estate can be a solid investment if it’s cash-flow positive and well-managed. But too many investors hang onto underperforming rentals that cost more in repairs, vacancies, and taxes than they bring in.
Instead of reassessing, they keep hoping the market will shift. Or they fear selling means admitting they made a mistake. Meanwhile, their so-called “investment” continues draining cash every month.
3. Individual Stocks That Never Recovered
A company’s stock tanks—maybe it was a pandemic, a PR disaster, or a shift in the market. Rather than cut losses, many investors double down or wait endlessly for a “comeback.”
They say, “I’ll sell when it gets back to what I paid.” That mindset, known as the sunk cost fallacy, can trap investors in dead-end holdings for years. Hope is not a strategy—but it’s a powerful trap.
4. That “Business Idea” That’s Still Not Profitable
Plenty of entrepreneurs pour money into a dream business—consulting, Etsy, food trucks, side hustles—and refuse to pivot even when the numbers make no sense.
They keep investing in new equipment, advertising, or coaching, even though the business hasn’t turned a profit in years. Pride and passion can blind people to the truth: not every good idea is a viable business.
5. Whole Life Insurance Policies
Many people are sold whole life insurance policies under the promise of “guaranteed returns” and “forced savings.” But the reality is that whole life often underperforms compared to investing that same money elsewhere.
Despite fees, low flexibility, and confusing structures, policyholders stick with it because they’ve been paying in for years and don’t want to “lose” that money. Unfortunately, staying the course doesn’t always mean winning the race.
6. Their Adult Children’s Failing Projects
Parents often bankroll their adult children’s failed startups, endless degrees, or risky ventures—not just with money, but with unwavering belief.
Even when it’s clear the idea isn’t working, they keep pouring in funds, afraid that saying no means abandoning their child. The emotional investment clouds the financial one, and sometimes the most loving answer is to stop enabling failure.
7. Outdated Mutual Funds with High Fees
Some investors stick with legacy mutual funds they bought decades ago, unaware that the high fees are quietly draining their returns.
Newer, low-cost ETFs or index funds often outperform them, but inertia—and the fear of making a mistake by switching—keep people stuck. If you’re still paying 1% or more in management fees, it’s time to ask: is that cost really earning its keep?
8. A Dream Car That Became a Money Pit
Classic car lovers and luxury car owners alike often justify ongoing repairs with phrases like “it’s an investment” or “it’ll be worth something someday.”
But most personal-use vehicles depreciate, especially when upkeep costs exceed any potential resale value. That dream car sitting in the garage might be draining your wealth more than building it.
9. Cryptocurrency That’s Been in Freefall
Crypto is known for volatility, but some investors refuse to let go—even when their coins have lost 80–90% of their value.
They hold onto defunct or obscure tokens, convinced that the next bull run will save them. But not all projects rebound. Sometimes the smartest move isn’t “hodling”—it’s cutting your losses and rebalancing your portfolio.
10. A Bad Financial Advisor
Many people stay with underperforming or inattentive financial advisors for years out of loyalty, fear, or just not knowing how to switch.
They hesitate to move on even when their portfolios lag, fees climb, and communication dwindles. But your financial health shouldn’t be held hostage by someone else’s mediocrity. You deserve advice that’s both smart and transparent.
Why We Stay in Bad Investments
So why do people cling to obviously poor-performing investments? Often, it boils down to a few psychological traps:
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Sunk cost fallacy: “I’ve already put so much in, I can’t quit now.”
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Ego and identity: “Selling means admitting I was wrong.”
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Hope as strategy: “It could turn around any day now.”
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Fear of regret: “What if I sell and it suddenly goes up?”
These emotions are human—but they’re also costly. And over time, they can quietly sabotage your financial future.
The Freedom of Walking Away
Letting go isn’t failure. It’s wisdom. Real investors know that part of growing wealth is knowing when to pivot, when to hold, and when to walk away.
Freeing up money from dead-end investments can allow you to explore smarter options: income-producing assets, diversified portfolios, or experiences that add joy to your life instead of anxiety. Sometimes, the best return on investment isn’t found in waiting—it’s in the decision to finally move on.
Have you ever held onto a bad investment longer than you should have? What finally convinced you to let go?
Read More:
13 Items That Seem Like Investments But Are Just Junk
4 Big Investments That Are Worth the Money
Riley Schnepf is an Arizona native with over nine years of writing experience. From personal finance to travel to digital marketing to pop culture, she’s written about everything under the sun. When she’s not writing, she’s spending her time outside, reading, or cuddling with her two corgis.
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