Holding on to the Losers: Finnish Evidence

Lehenkari, Mirjam; Perttunen, Jukka

doi:10.1207/s15427579jpfm0502_5

Cited by 32 publications

(14 citation statements)

References 26 publications

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“…This explanation is consistent with the argument of Lehenkari & Perttunen (2004), & Shefrin & Statman (1985. Another reason is that, in decreasing periods, the market liquidity is very low as buyers want to buy at floor price while sellers want to sell at ceiling price.…”

Section: Prospect Variables and Investment Performancesupporting

confidence: 89%

“…Regret is an emotion that occurs after people make mistakes. Investors avoid regret by refusing to sell decreasing shares and willing to sell increasing ones (Fogel & Berry, 2006;Lehenkari & Perttunen, 2004). Regret aversion is the tendency to avoid actions that could create discomfort over prior decisions, even though those actions may be in the individual's best interest.…”

Section: Prospect Theorymentioning

confidence: 99%

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The Impact of Behavioural Factors on Investment Decision Making and Performance of CSE Investors in Eastern Province of Sri Lanka

Rajeshwaran

2020

Sri Lanka Jnl Econ. Res.

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Objectives of the study are twofold; first, to identify behaviour of CSE investors in Eastern province of Sri Lanka; second, to examine how behavioural factors impact on investment performance of CSE investors in the province. The research was conducted from positivism perspective and deductive reasoning was used as research approach. Survey strategy was applied to collect data and time horizon was cross sectional. Proportionate stratified random sampling technique was applied to choose the sample from the districts. Data were collected via questionnaires from 374 investors of CSE in the province. Mean, standard deviation, correlation and multiple regression were applied. Results show that all four behavioural factors and investment performance have fallen to moderate levels. According to Heuristic variables, investors rely on their skill, knowledge and previous experience. The investors mostly avoid loss and regret in investment on stocks as per the Prospect variables. Out of Market variables, the investors carefully consider the price changes of stocks while moderately analyse the companies' customer preference. In line with Herding variable, the investors also follow others' decision to invest. Heuristic variables are positively related with investment performance while other variables namely prospect variables, market variables and Herding variables are negatively related with investment performance. Recommendations are given to current and potential investors as well as executives in the stock market for promoting investment in stock exchange

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Section: Prospect Variables and Investment Performancesupporting

confidence: 89%

Section: Prospect Theorymentioning

confidence: 99%

The Impact of Behavioural Factors on Investment Decision Making and Performance of CSE Investors in Eastern Province of Sri Lanka

Rajeshwaran

2020

Sri Lanka Jnl Econ. Res.

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“…Moreover, a loss coming after prior gain is proved less painful than usual while a loss arriving after a loss seems to be more painful than usual (Barberis & Huang, 2001). In addition, Lehenkari and Perttunen (2004) find that both positive and negative returns in the past can boost the negative relationship between the selling trend and capital losses of investors, suggesting that investors are loss averse. Risk aversion can be understood as a common behavior of investor, nevertheless it may result in bad decision affecting investor's wealth (Odean, 1998).…”

Section: Prospect Theorymentioning

confidence: 89%

The Behavior Patterns of Investors in Thailand Stock Market

Tran

2017

AJFA

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The purpose of this paper is to investigate behavioral patterns expressed by investors in the Thailand stock market. The paper examines investment decision-making processes in the context of the current financial market in Thailand to shed some light on behavioral-induced pattern behind such investments. Data for this research was collated from 8 individual investors by semi-structured and in-depth interview. There are four behavioral factors of individual investors in Thailand Stock Exchange: Overconfidence, Excessive Optimism, Psychology of risk, and Herding Behavior. Securities Companies may also use the findings of this research for better understanding on investors' decision to give better recommendations to them. Stock prices then reflect their true value and Thailand stock market becomes the yardstick of the economy's wealth and helps enterprises to raise capital for business activities.

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“…They argue that people may monitor their finances more often in a rising market because they believe that they have to act sooner in a rising market than in a falling market. Jung Grant et al point out that investors tend to hold on to falling stocks for too long, and sell rising stocks too soona phenomenon known as 'the disposition effect' (e.g., Lehenkari & Perttunen, 2004;Odean, 1998;Shefrin & Statman, 1985). One explanation for the disposition effect is that people take a short-term outlook in a rising market (as they feel like they need to act sooner), and a longer-term outlook in a falling market (as they feel like they have to wait until the market is rising again, before they act).…”

Section: Factors That May Influence When People Monitor Their Financesmentioning

confidence: 99%

Monitoring personal finances: Evidence that goal progress and regulatory focus influence when people check their balance

Chang

Webb

Benn

et al. 2017

Journal of Economic Psychology

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When do people check the balance of their personal bank accounts? To investigate this issue, we examined whether the monitoring of personal finances is influenced by peoples' perceptions of their progress toward financial goals and their regulatory focus (i.e., whether the goal involves attaining a positive outcome or avoiding a negative outcome). Study 1 examined how often participants logged into their online bank accounts to check their balance and found that the worse they perceived their progress toward their most important financial goal to be, the more often they checked. In Studies 2 and 3 we developed a simulation of personal financial management in which participants were given financial goals that involved attaining a positive outcome and avoiding a negative outcome. Goal progress was manipulated via the balance in participants' account at the start of the simulation (Studies 2 and 3) and the rate at which their balance increased (Study 3). Participants in Study 2 checked their balance more often when they perceived their progress toward financial goals to be poor and when they considered avoiding the negative outcome to be important. In Study 3, the frequency with which participants checked their balance was influenced by an interaction between goal progress, the regulatory focus of the goal, and the importance of the goal. Participants who felt that gaining money was relatively important were more likely to check their balance when their progress was good, whereas participants who felt that avoiding losing money was relatively important were more likely to check their balance when progress was both good and bad. Taken together, these findings contribute to our understanding of how people manage their personal finances, and self-regulation more generally, by revealing that how often people monitor their personal finances depends on perceptions of goal progress, regulatory focus, and the importance of the goal.

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Holding on to the Losers: Finnish Evidence

Cited by 32 publications

References 26 publications

The Impact of Behavioural Factors on Investment Decision Making and Performance of CSE Investors in Eastern Province of Sri Lanka

The Impact of Behavioural Factors on Investment Decision Making and Performance of CSE Investors in Eastern Province of Sri Lanka

The Behavior Patterns of Investors in Thailand Stock Market

Monitoring personal finances: Evidence that goal progress and regulatory focus influence when people check their balance

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