Are Investors Really Reluctant to Realize Their Losses? Trading Responses to Past Returns and the Disposition Effect

We examine how investor preferences and beliefs affect trading in relation to past gains and losses. The probability of selling as a function of profit is V-shaped; at short holding periods, investors are more likely to sell big losers than small ones. There is little evidence of an upward jump in s...

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Bibliographic Details
Published in:	The Review of financial studies 2012-08, Vol.25 (8), p.2485-2532
Main Authors:	Ben-David, Itzhak, Hirshleifer, David
Format:	Article
Language:	English
Subjects:	Belief & doubt Disposition of assets Experimental methods Financial economics Financial portfolios Investment analysis Investors Morality Personal finance Polynomials Preferences Probabilities Profits Prospect theory Purchase price Securities trading Stock prices Stock sales Stock shares Stocks Studies Trade Trading
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