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Indian retail investors tend to lose in stock markets: ISB

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The ISB study found that about 20.2 lakh individual retail investors in India consistently chase a zero rate of return on their stock investments when they make decisions themselves

Retail equity investors in India systematically lose out to other categories of players because they sell the winning stocks too quickly and hold on to the losing stocks too long, reports PTI quoting a study.

The study by Hyderabad-based Indian School of Business (ISB) found that individual retail investors in India, numbering 2.02 million - largest in the world - consistently chase a zero rate of return on their stock investments when they make decisions themselves.

The study attributed the recurring losses to these types of investors to the 'disposition effect' (selling the winning stocks too quickly and holding on to the losing stocks too long) and 'overconfidence' (taking credit for good decisions and attributing bad decisions to luck) for three categories of investors separately.

Th…