Wanting to get your money's worth seems reasonable—until it isn't.

If you've ever poured more money into a bad investment just to recoup what you already put in, you've wrestled with a cognitive bias called the sunk cost fallacy. Ahead, we'll explain how it works, explore real-world examples of the sunk cost fallacy and show you how to keep it from derailing rational decision-making.

The sunk cost fallacy is the tendency to keep investing money, time, or effort into something simply because of what you've already put in—even when walking away would serve you better. Have you ever started watching a TV show, only to find that a few episodes in, you're not enjoying it? The sunk cost is the time you spent watching those episodes—time you can never get back, whether you stop watching now or push through to the finale.

When it comes to trading, it's the money—and possibly time and energy—you may have already lost on a bad trade or investment. The desire to try to get back that sunk cost may keep you from cutting the trade and moving on, or worse yet, cause you to double down on your position.

Sunk costs influence decisions all the time—so often that the bias is sometimes called the "Concorde fallacy," after the now-scrapped supersonic jet that once flew between Europe and New York. The British and French governments continued to spend money on the project long after they knew the economic rationale for it was dead. The sums they'd already spent on the Concorde became a justification to keep spending more—the very definition of throwing good money after bad.

Investing is inherently forward-looking. Whether you're saving money in a savings account, putting it in the stock market, or investing in your own business, you're likely thinking about accumulation, future gains, and growth. Sometimes these investments don't pan out. That can hurt, but what you do afterward matters a lot.

Throwing more money at a losing investment, trading strategy, or business idea in the hope of justifying invested money already spent can open the way to bigger losses. This kind of escalation can be difficult to resist, especially when dealing with large initial investments.

This doesn't mean you should become so indifferent to losses that you take on excessive risk. However, it's important to always judge your investments according to their future usefulness or prospects, and not your past feelings about them. Don't let the sunk cost fallacy transform that albatross around your neck into a Concorde.

In that spirit, here are a few tips to consider:

• Review your investing strategy at least once a year. Most investments aren't "set it and forget it," so you need to make sure your strategy hits the marks you've laid out for it. Are you still on track? Don't stick with a strategy just because it worked in the past. Markets change. You can become more—or less—willing to take risks. Your needs can change over time—and so can your course of action. What worked before might not cut it anymore. Make sure your investments are geared toward the future, not the past. Talk with a professional if you're not sure.
• Take a hard look at any losing investments and ask whether you could do better elsewhere. When you stick with a losing asset or investment strategy, you're not just committing to a position that isn't working—you're also sacrificing the potential gains you could have earned with a different approach.
• Commit to a plan when trading. Avoiding the sunk cost fallacy can be challenging when markets are moving quickly and a trade moves against you. One way to stay disciplined is to draft a trading plan ahead of time outlining what you're trying to accomplish and how you are going to accomplish it. Key elements of your trade plan should include your investing time horizon, entry and exit strategies, position size and trade performance review. Remember, trading involves losses. The goal is not to win on every trade, but to have more profitable trades than unprofitable trades—in other words, to make more on your winners than you lose on your losers.
• Use specific order types to exert more control over your trades. Consider using limit orders, or stop or stop-limit orders to help bring more discipline to your trading. Each order type can be used in particular market conditions to meet certain goals, such as executing trades at prices you specify when markets get volatile.
• Don't waste your  losses. If you have a losing investment in a taxable account, think before you double down. Assets that have lost value can be used to reduce your tax liability through a process known as tax-loss harvesting. This involves selling a losing investment to offset taxable gains elsewhere in your portfolio and buying back a comparable, but not identical position.
• Seek out advice. Find a knowledgeable person you trust who doesn't carry any of the emotional baggage and see what they have to say about your situation.

Sometimes past spending genuinely shapes the path forward. A half-finished kitchen renovation, for example, may need to be completed simply to make the home usable again. The fallacy isn't in remembering what you've spent—it's in letting that spending justify more spending without a forward-looking case for it.

The disposition effect describes a specific pattern: selling winning investments too early and holding losing ones too long. The sunk cost fallacy is the broader bias that helps drive the second half of that pattern—the urge to hold a loser in hopes of recovering what's already been lost.

Sunk cost looks backward; opportunity cost looks forward. A sunk cost is money, time, or effort you've already spent and can't get back. An opportunity cost is the value of what you give up by choosing one path over another—the return you could have earned by deploying that capital, time, or attention somewhere else. The two compound in the sunk cost fallacy: holding a losing position means absorbing the loss and forgoing the gains a better alternative might have produced.

Yes. Sitting through a football game in the freezing cold because you paid for the ticket, or finishing a book you stopped enjoying three chapters in, are both sunk cost fallacies. The cost just happens to be measured in hours rather than dollars.