More on the Participant-Investor . . .
An interesting article from SFGate.com--"Investing Like Dummies: Cal professor says most of us are playing poorly with our own money"--reports on the peculiar behaviors of the average investor. Here are a few from studies performed by Terrance Odean at UC Berkeley's Haas School of Business as highlighted in the article:
- "One study Odean did with colleagues found that people are more sensitive to up-front load fees but less sensitive to ongoing fees -- meaning people are more likely to avoid funds with front-end fees, even if the ongoing fees could end up costing them more money."
- "In another study, Odean found that most people hold on to losing stocks and sell winners -- except during December, when they're trying to realize losses for taxes. This is clearly irrational -- we simply don't want to face the loss."
- "Men, particularly single men, made less money on their stocks than women investors solely because the men were overconfident. Both men and women picked equally so-so stocks, but the women, who were less likely to think they ruled the market, traded 45 percent less, which increased their earnings."
Posted by B. Janell Grenier at January 21, 2004 10:26 PM