Are Hungarian investors reluctant to realize their losses?

Mihály Ormos and István Joó

Economic Modelling, 2014, vol. 40, issue C, 52-58

Abstract: We examine whether Hungarian investors liquidate their winning investments too early and close their losing positions too late. We analyze 130 university students' trading activity for 2009 and 2010. We investigate the disposition effect by four distinct methodologies: by the realized and non-realized gains and losses; by comparing the length of the holding periods; by analyzing the whole length of open positions and by comparing the performance of the transactions. We discover that Hungarian investors exhibit a disposition effect that worsens their investment performance in general. According to our results, the investors time their sale and purchase orders inaccurately.

Keywords: Disposition effect; Overconfidence; Anchoring; Behavioral finance; Investors behavior (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:40:y:2014:i:c:p:52-58

DOI: 10.1016/j.econmod.2014.03.018

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