Behavioural Finance
Disposition Effect
Definition
What is Disposition Effect?
The tendency to sell winners too early and hold losers too long.
Example in practice
How This Looks in Practice
An investor locks in a small gain but keeps a collapsing share.
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Related Terms
Behavioural Finance
Loss Aversion
The tendency to feel losses more strongly than equivalent gains.
Behavioural FinanceOverconfidence Bias
The tendency to overestimate one's knowledge, forecasting ability, or control.
Behavioural FinanceConfirmation Bias
The tendency to seek or interpret information that supports an existing belief.
Sustainable InvestingESG Investing
Incorporating environmental, social, and governance factors into investment analysis or ownership.