American Finance Association Are Investors Reluctant to Realize Their Losses

@inproceedings{Odean1998AmericanFA,
  title={American Finance Association Are Investors Reluctant to Realize Their Losses},
  author={Terrance Odean},
  year={1998}
}
I test the disposition effect, the tendency of investors to hold losing investments too long and sell winning investments too soon, by analyzing trading records for 10,000 accounts at a large discount brokerage house. These investors demonstrate a strong preference for realizing winners rather than losers. Their behavior does not appear to be motivated by a desire to rebalance portfolios, or to avoid the higher trading costs of low priced stocks. Nor is it justified by subsequent portfolio… CONTINUE READING

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