The duration of a holding period is among the least relevant pieces of information available to the investor deciding whether to continue holding a position. How long one has held something says nothing about whether it should be held going forward—it says something about one's history, which is interesting but not investment-relevant. Only the current investment characteristics of the position are relevant to the forward-looking decision: its current price, its fundamental outlook, the quality of the investment thesis as it stands today, and the opportunity cost of maintaining the capital commitment. None of these is improved or worsened by the duration of the holding period.
Yet the holding period exerts a powerful psychological influence on exit decisions. The investor who has held a position for five years experiences a qualitatively different relationship with it than the one who has held it for five months. The long-held position is familiar, has been through multiple market cycles, has been defended through periods of underperformance, and has accumulated a history of decisions—each hold decision, each decision not to sell when it would have been easier—that creates a sense of accumulated investment. This accumulated investment feels like it has value that should not be abandoned without compelling reason.
The specific manifestation of this reasoning is the statement "I've held it this long, it would be a shame to sell now." This statement is a sunk cost fallacy in temporal form: the time already invested in holding the position is being given weight in the decision about whether to continue holding. But time already spent monitoring, analysing, and making hold decisions for a position is sunk in exactly the same way as money already lost in it—it is gone regardless of whether the position is held or sold, and its past occurrence should not influence the forward-looking decision about what to do with the capital.
The long holding period may have been entirely rational—if the investment thesis was valid throughout and the prospective return was adequate at each review, continued holding was the correct decision at each point. Or it may have been the product of sunk cost reasoning and thesis rationalisation—if the fundamental basis for holding deteriorated progressively but the exit was deferred because of the accumulated history. In either case, the holding period itself tells the investor nothing useful about whether to continue holding; it is the current state of the investment thesis and the current relationship between price and fundamental value that should govern the decision.
The investor who can genuinely ask, of a long-held position, "if I were encountering this investment for the first time today, with no history and no prior position, would I buy it at the current price?"—and who can answer that question honestly—has the only information she needs to make the correct hold-or-sell decision. If the answer is yes, hold; the current investment characteristics justify continued commitment. If the answer is no, sell; the current characteristics do not justify the commitment, and the history of the holding period is irrelevant to this conclusion. The history may explain how she came to own a position she would not buy today, but it does not change what she should do about it now.