 Posted: Mon, Jun 4 2007, 5:35 pm EDT Post subject: Behavioral finance |
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| I like the findings offered by behavioral finance:
"Faced with the prospect of selling a stock, investors become emotionally affected by the price at which they purchased the stock. So, they avoid selling it as a way to avoid the regret of having made a bad investment, as well as the embarrassment of reporting a loss." "People tend to view the possibility of recouping a loss as more important than the possibility of greater gain." "When a market is moving up or down, investors are subject to a fear that others know more or have more information. As a consequence, investors feel a strong impulse to do what others are doing. " Links: http://www.investopedia.com/articles/05/032905.asp http://www.investopedia.com/articles/02/112502.asp |
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