Holding on to the Losers: Finnish Evidence

Autor:	Jukka Perttunen, Mirjam Lehenkari
Rok vydání:	2004
Předmět:	Financial economics Capital (economics) Phenomenon Economics Disposition effect Irrationality Experimental and Cognitive Psychology Stock market Negative association Investor behavior Finance
Zdroj:	Journal of Behavioral Finance. 5:116-126
ISSN:	1542-7579 1542-7560
DOI:	10.1207/s15427579jpfm0502_5
Popis:	Recent literature reports evidence on investor behavior that is inconsistent with traditional finance theory. One currently being debated is behavioral irrationality, the tendency of investors to hold losing investments too long and sell winning investments too soon, a phenomenon known as the disposition effect. We analyze the trading records of all individual investors in the Finnish stock market and document that capital losses reduce the selling propensity of investors. There is, however, no opposite effect identifiable with respect to capital gains. We also find, somewhat surprisingly, that both positive and negative historical returns significantly reinforce the negative association between the selling propensity of investors and capital losses. While these findings offer no direct support for the disposition effect, they do suggest that investors are loss averse.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::ecf99565bb2d68d261b52c866c65cb46 https://doi.org/10.1207/s15427579jpfm0502_5 Zobrazit plný text záznamu Plný text ve formátu PDF