Are French Individual Investors Reluctant to Realize Their Losses?
27 Pages Posted: 14 Oct 2008
Date Written: April 2008
We analyze the presence of the disposition effect for 90 244 French individual investors based on a large brokerage account database between 1999 and 2006. Main results show that French investors demonstrate a strong preference for realizing their winning stocks rather than their losing ones. However, the fiscal impact in France appears to be moderate relative to the one observed in other countries. Moreover, results indicate that the behavioral bias is not eliminated for sophisticated individual investors (higher trading activity or international diversification). Finally and more originally, based on French account specificities; we demonstrate that the change of "tax account type" does not imply any change in investors' behavior.
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