Selling stocks and find that they continue to grow, investors are beginning to tear my hair out, says study co-author Brad Barber of the University of California at Davis. Disappointment and regret because of the loss of profits are so high that people prefer to buy back previously sold and sold again. Moreover they do not pay attention to the fact that this combination results in a loss of money. No new investors do not receive benefits.
Researchers analyzed trade statistics 66,465 US households used the services of a major broker of bills from January 1991 to November 1996, and 596,314 families who traded through another unnamed retail broker from January 1997 to June 1999.
Scientists have traced the activities of investors, day after day, discover the amazing thing that goes far beyond the art financial game.
Not only do people prefer to re-purchase shares, which make a profit in the past: they also tend to buy these shares again, even if they had lost in the price.
Psychologists call this phenomenon kontrafaktualnym thinking: instead assess the current situation, people look to the past, fantasize, as "it could be", and act according to his imagination. Researchers believe that investors coming thus motivated by a desire to avoid feelings of frustration and feel proud of whiz.
"If the stock market was rovnenko playing field, and trade was worth nothing, it could be argued that the ability to improve the emotional state by repurchasing - really valuable asset" - ironically the authors work.
Results of the study were published in Journal of Marketing Research.