Do you suffer from getevnitis?
Investors should start listening to the planner in them and stick to a discipline in investing
Behavioural economists have shown that investors, especially the retail ones, exhibit a tendency to sell their winning stocks rather too quickly and a reluctance to get rid of their loosing stocks. Investors often take these actions going against their own rational judgment. This tendency has been termed as “disposition effect" by Hersh Shefrin and Meir Statman. However, such actions prove expensive to investors as the stocks they sold tend to move up, and vice versa. Experiments conducted in our lab as well as prior research on Indian investors reveal that Indian investors are equally prone to the disposition effect.