...experimental evidence indicates that participation in stock message boards/forums increases a typical investor's propensity to trade and decreases actual investment performance. Investors may want to factor this effect into their information search and processing practices.
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...evidence from price and volume dynamics of stocks associated with CEO interviews on CNBC indicates that the financial media temporarily move stock prices by grabbing the attention of individual investors, especially for first-time interviews of growth stock CEOs.
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...evidence from a fairly large recent sample of U.S. stocks indicates that traders may be able to suppress trading friction by systematically executing sales at the open and buys later in the trading day.
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How much individual investing is lottery-like, just hoping for a big score with no analysis? In their June 2010 paper entitled “Natural Experiments on Individual Trading: Substitution Effect Between Stock and Lottery”, Xiaohui Gao and Tse-Chun Lin relate individual trading activity to national lottery jackpot size in Taiwan. Using twice-weekly lottery jackpots and contemporaneous...
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...evidence from simple tests indicates that the U.S. stock market since 1990 performs better on average around new moons than full moons, and during waxing moons than waning moons. However, the levels of relative outperformance are small compared to market variability, so trading these differences is very risky.
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...evidence from laboratory experiments indicates that simulated experience, especially with graphical display of results, instills a more realistic grasp of investment choices than does exposure to numerical statistics.
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In the opening paragraphs of his April 2010 article entitled “Traditional vs. Behavioral Finance”, Robert Bloomfield handicaps his subject contest as follows:
“The traditional...
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...The Little Book of Behavioral Investing is a broad survey of behavioral biases and countermeasures as related to financial markets, especially for value investors. The self-awareness espoused may...
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...evidence indicates that the sign (much more than size of profit/loss) of recent trades influences the future trading behavior of individual investors. This influence is adverse to overall...
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