Don Sampson begins a meeting with his financial adviser by outlining his investment philosophy as shown below:
Statement Number Statement
1..................Investments should offer strong return potential but with very limited risk. I prefer to be conservative and to minimize losses, even if I miss substantial growth opportunities.
2..................All nongovernmental investments should be in industry-leading and financially strong companies.
3...................Income needs should be met entirely through interest income and cash dividends. All equity securities held should pay cash dividends.
4..................Investment decisions should be based primarily on consensus forecasts of general economic conditions and company-specific growth.
5...................If an investment falls below the purchase price, that security should be retained until it returns to its original cost. Conversely, I prefer to take quick profits on successful investments.
6..........I will direct the purchase of investments, including derivative securities, periodically. These aggressive investments result from personal research and may not prove consistent with my investment policy. I have not kept records on the performance of similar past investments, but I have had some “big winners.”

Select the statement from the table above that best illustrates each of the following behavioral finance concepts. Justify your selection.
a. Mental accounting.
b. Overconfidence (illusion of control).
c. Reference dependence (framing).