Trading is a crucible of emotions and analysis. During volatile markets and periods of economic change, it is common for regular investors to ask whether they should be more active with their portfolios. In this episode, Mark Riepe is joined by Randy Frederick ( , vice president of trading and derivatives at the Schwab Center for Financial Research. Mark and Randy review a list of biases that have an impact when you’re making trading decisions, and then they discuss techniques that can blunt the impact of those biases.
• This study of day traders ( using real money revealed the link between emotions and trading performance.
• This study from the Journal of Marketing Research ( documented the tendency of investors to repurchase stocks they previously sold for a gain rather than ones they previously sold for a loss and repurchase stocks that have lost value subsequent to a prior sale rather than those that have gained value.
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Important Disclosures:
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
Investing involves risk including loss of principal.
Past performance is no guarantee of future results.
This is for general informational purposes only and is not intended, nor should it be construed, as tax, investment or legal advice. Consult with your legal counsel and tax advisors about your particular circumstances.
The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.
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