Are French Individual Investors Reluctant to Realize Their Losses?

27 Pages Posted: 14 Oct 2008

See all articles by Marie-Hélène Broihanne

Marie-Hélène Broihanne

Strasbourg University, LaRGE Research Center, EM Strasbourg Business School

Maxime Merli

Strasbourg University, LaRGE Research Center, EM Strasbourg Business School

Shaneera Boolel-Gunesh

University of Strasbourg - EM Strasbourg Business School

Date Written: April 2008

Abstract

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.

Suggested Citation

Broihanne, Marie-Hélène and Merli, Maxime and Boolel-Gunesh, Shaneera, Are French Individual Investors Reluctant to Realize Their Losses? (April 2008). AFFI/EUROFIDAI, Paris December 2008 Finance International Meeting AFFI - EUROFIDAI, Available at SSRN: https://ssrn.com/abstract=1282119 or http://dx.doi.org/10.2139/ssrn.1282119

Marie-Hélène Broihanne

Strasbourg University, LaRGE Research Center, EM Strasbourg Business School ( email )

PEGE
61 avenue de la Forêt Noire
Strasbourg, 67000
France

Maxime Merli

Strasbourg University, LaRGE Research Center, EM Strasbourg Business School ( email )

PEGE
61 avenue de la Forêt Noire
Strasbourg, 67000
France

Shaneera Boolel-Gunesh (Contact Author)

University of Strasbourg - EM Strasbourg Business School ( email )

61 Avenue de la Forêt Noire
Strasbourg, 67000
France

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