An important psychological factor that influences our investment decision making process is the concept of perceived value. Predatory sales people have long manipulated this concept to sell their products.
Value much like beauty is in the eye of the beholder. If I can make you see value I can get you to make the decision I want you to make. The secret is in the creation of perceived value. This can be directly connected to loss aversion through the concept of sunk costs.
Once you make a decision to invest or spend your hard earned money you have committed to a perceived value in your mind. This value has to continue to be as you perceived it or it causes great psychic pain. You can't allow the pain of poor decision to interfere with you perception of value.Unfortunately the vast majority fo the time someone else has dictated the value for you. This commonly happens because very few people are consciously aware of what they truly value.
Rational behavior would suggest that an individual would make on-going decsions based upon their own best interests, they wouldn't allow perception to interfere. Yet we consistently allow our best interests to be ignored in order to protect the value of previous decisions. This allows us to protect our self-image when we have erred substantially. This is one of the most common reasons individuals are easily manipulated by scammers and fraudsters.
Victims of scams and frauds will work overtime to protect their self-image and deny all existence of evidence which was available prior to their poor financial decision. After all in order to face this pain we would have to admit and feel the pain associated to our own guilt associated with our greed.
No one wants to admit they fell victim to their own greed. We will do anything to avoid this reality.
This is the reason we hold on to investments to long even when all hope of gain is lost. It is also the reason we will make even poorer decisions attempting to regain what we lost. This never ending cycle ends just as it does for the degenerent gambler. The difference is that the gambler can lean on the premise that they have an illness. The same psychological triggers are in play for the investor who becomes victimized by the scammers and fraudsters.
In general you can insulate and inoculate yourself from these events by identifying your own personal values. Once you have a keen understanding of your sense of value you can begin to make better decisions in financial matters. Your journal comes into play once again, write down the following question and make the effort to go at least 7 levels deep with it. What's important about money to me? Write down your answer and then re-ask the question for another level. Continue for at least 7 levels and you will identify the most important values for your invesment making decisions. Once you have this foundation it will be increasingly difficult for anyone to manipulate your perception of what value is for you.