Vol. V, No. III (Summer 2020) Global Social Sciences Review (GSSR) p- ISSN: 2520-0348 URL: http://dx.doi.org/10.31703/gssr.2020(V-III).13 e-ISSN: 2616-793X DOI: 10.31703/gssr.2020(V-III).13 ISSN-L: 2520-0348 Pages: 118 ‒ 127 Citation: Awais, M., Kashif, S., & Raza, A. (2020). Status Quo, Monetary Loss-Aversion and Forecasting - An Approach to Investment During Amygdala Damages & Asymmetry. Global Social Sciences Review, V(III), 118-127. https://doi.org/10.31703/gssr.2020(V-III).13 Muhammad Awais * Sadaf Kashif † Asif Raza ‡ Status Quo, Monetary Loss-Aversion and Forecasting - An Approach to Investment During Amygdala Damages & Asymmetry The research essay aims to understand investor’s ability to forecast having the perception of status quo and monetary loss-aversion in the situation of amygdala damages and asymmetry during decisions regarding stock’s investment and use of several techniques to make efficient investment decisions based on optimal forecasting. The objectives of this study are to inquire about the irrationalities in investors at the time of stock’s investment, having status quo and monetary loss-averse bias of investors at the time of amygdala damages and asymmetry and find-out the ways to deal with these situations. A qualitative research style was used for data collection for the subject study. Partially-organized discussions were arranged to get information in detail. A sample of 15 experienced stock marketers and brokers and 35 investors from the Pakistan stock exchange were selected for this study. This inquiry found the definite type of edgy and biased investor’s attitude in the market and also found their solutions. This study perceptibly peaks the ways to deal with stress and biasness through optimal forecasting techniques and some other suggestions. Key Words: Status Quo, Monetary Loss-Aversion, Forecasting, Investment Introduction Investors almost always face a very common issue of maintaining the purchasing power of their wealth, i.e., assets and still manage to fetch the real returns, which is also aligned with their investment goals. The two parts of the mentioned problem remain critical, but one may question which one of the investor’s assets has the potential to survive the consequences of the inflation – due to asymmetry – but still remains unconcluded in our literature of modern finance. Numerous studies have already been conducted to analyze the relationship between inflation and stock returns; most of this literature explored the links between the two. The economic theory also mentions the existence of the relationship between inflation and returns on the stock. Apart from the many studies, which resulted in the exploration of linkage between stock returns and inflation, the underline principles are not clear, whether the relationship is clearly positive or negative in nature. The phenomenon of inflation will occur whenever the real value of money decreases or, in other words, the same amount of money is able to buy lessor goods and services in the same geographical area. A common belief and theory about equity investment are that equities are generally covered, i.e., hedge against inflation because it is believed that these equities own the real assets of the business, and hence inflation cannot affect these real assets (Labadie, 1989; Tsai, 2020). Making blind investments merely on the belief of this argument in itself is a very risky decision because a negative relationship was found by most of our research who analyzed this relationship. In order to protect our investors from such losses, it is important to check the impact on equities returns from inflation, based on selection through forecasting. A lot of smart investors like Marc Faber and Warren Buffet believe that among the best-hedged stocks against inflation are the common stocks. Investors may protect themselves from inflation by making investments in common stocks. The matter of fact is that our theory claims that returns on equities will stay neutral to inflation because of the stock’s rights on real assets of the business. Abstract ‡ Head of Business Operations, DPL (Pvt) Ltd. Islamabad, Pakistan Email: m.awais@fui.edu.pk * Assistant Professor, Department of Economics & Finance, Foundation University Islamabad, Pakistan. † Assistant Professor, Department of Business Administration, Iqra University Islamabad, Pakistan.