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During an interview with her investment advisor, Mr Saruman, a retired investor made the following two statements: I have been very pleased with the returns

During an interview with her investment advisor, Mr Saruman, a retired investor made the following two statements:

"I have been very pleased with the returns I've earned on the Gondor stock over the past two years, and I am certain that it will be a superior performer in the future."

"I am pleased with the returns from the Gondor stock because I have specific uses for that money. For that reason, I certainly want my retirement fund to continue owning the Gondor stock."

Identify which principle of behavioural finance is most consistent with each of the investor's two statements. Justify your choice

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