This paper sheds light on the choice of framing in investors’ portfolio decisions by exploiting variations in the disposition effect—specifically, we examine how investors trade in response to stock-level versus portfolio-level gains. First, we show that the disposition effect is stronger when the portfolio is at a loss and nearly disappears when the portfolio is at a gain. Second, the impact of portfolio performance is strongest for capital gains from the rest of the stock holdings, and it monotonically decreases as the source of the capital gains bears less resemblance to US common stocks. These findings can be interpreted in a hedonic mental accounting framework (Thaler 1985), in which investors optimally choose the grouping of mental accounts when evaluating gains and losses—this allows investors to frame selling a losing stock as realizing part of a winning portfolio and therefore mitigates the disposition effect when the portfolio is at a gain; the convenience of conducting such mental account editing depends on the similarity of the holdings. Our findings also imply commonality in the disposition effect, which are borne out in the data.