Disposition Effect: Brazilian Investors’ Behavior during the Covid-19 Pandemic
This study investigates the disposition effect with regard to Brazilian investors, with focus on the year 2020. The database is composed by more than 12,000 trades by 274 investors. We follow the method of Odean (1998) to estimate the proportions of gains and losses realized and test the null hypoth...
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| Format: | Article |
| Language: | English |
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FUCAPE Business School
2023-01-01
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| Series: | BBR: Brazilian Business Review |
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| Online Access: | http://www.redalyc.org/articulo.oa?id=123075331001 |
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| author | Pedro Lucas de Albuquerque Barreto Claudio Henrique da Silveira Barbedo Eduardo Camilo-da-Silva |
| author_facet | Pedro Lucas de Albuquerque Barreto Claudio Henrique da Silveira Barbedo Eduardo Camilo-da-Silva |
| author_sort | Pedro Lucas de Albuquerque Barreto |
| collection | DOAJ |
| description | This study investigates the disposition effect with regard to Brazilian investors, with focus on the year 2020. The database is composed by more than 12,000 trades by 274 investors. We follow the method of Odean (1998) to estimate the proportions of gains and losses realized and test the null hypothesis of equality of these proportions in each portfolio. The results suggest that Brazilian investors behave in line with the disposition effect. They sell winning stocks too early and hold losing stocks too long. A stock that is gaining value is more likely to be sold from day to day compared to a stock that is losing value. The disposition effect was not found in March, which suggests that investors employed a loss-limit during periods of market stress, no matter if the stock went up or down. |
| format | Article |
| id | doaj-art-382bdf6ec6d048a5b3dff19ee7d2fa35 |
| institution | Kabale University |
| issn | 1807-734X |
| language | English |
| publishDate | 2023-01-01 |
| publisher | FUCAPE Business School |
| record_format | Article |
| series | BBR: Brazilian Business Review |
| spelling | doaj-art-382bdf6ec6d048a5b3dff19ee7d2fa352025-02-06T23:39:34ZengFUCAPE Business SchoolBBR: Brazilian Business Review1807-734X2023-01-01201117http://dx.doi.org/10.15728/bbr.2023.20.1.1.ptDisposition Effect: Brazilian Investors’ Behavior during the Covid-19 PandemicPedro Lucas de Albuquerque BarretoClaudio Henrique da Silveira BarbedoEduardo Camilo-da-SilvaThis study investigates the disposition effect with regard to Brazilian investors, with focus on the year 2020. The database is composed by more than 12,000 trades by 274 investors. We follow the method of Odean (1998) to estimate the proportions of gains and losses realized and test the null hypothesis of equality of these proportions in each portfolio. The results suggest that Brazilian investors behave in line with the disposition effect. They sell winning stocks too early and hold losing stocks too long. A stock that is gaining value is more likely to be sold from day to day compared to a stock that is losing value. The disposition effect was not found in March, which suggests that investors employed a loss-limit during periods of market stress, no matter if the stock went up or down.http://www.redalyc.org/articulo.oa?id=123075331001prospect theorydisposition effectbehavioral financeloss aversion |
| spellingShingle | Pedro Lucas de Albuquerque Barreto Claudio Henrique da Silveira Barbedo Eduardo Camilo-da-Silva Disposition Effect: Brazilian Investors’ Behavior during the Covid-19 Pandemic BBR: Brazilian Business Review prospect theory disposition effect behavioral finance loss aversion |
| title | Disposition Effect: Brazilian Investors’ Behavior during the Covid-19 Pandemic |
| title_full | Disposition Effect: Brazilian Investors’ Behavior during the Covid-19 Pandemic |
| title_fullStr | Disposition Effect: Brazilian Investors’ Behavior during the Covid-19 Pandemic |
| title_full_unstemmed | Disposition Effect: Brazilian Investors’ Behavior during the Covid-19 Pandemic |
| title_short | Disposition Effect: Brazilian Investors’ Behavior during the Covid-19 Pandemic |
| title_sort | disposition effect brazilian investors behavior during the covid 19 pandemic |
| topic | prospect theory disposition effect behavioral finance loss aversion |
| url | http://www.redalyc.org/articulo.oa?id=123075331001 |
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