Investor Logins and the Disposition Effect

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Abstract

Using data from an online brokerage, we examine the role of investor logins in trading behavior. We find that a new reference point is created when an investor logs in and views their portfolio. We observe this as a disposition effect on returns since last login, in addition to the traditional disposition effect on returns since purchase. Further, these reference points produce a strong interaction such that even a small loss since last login nullifies the positive effect of a gain since purchase. This interaction follows if investors select the higher, more aspirational price as a reference point.

The Speaker

Dr. Edika Quispe-Torreblanca is an Assistant Professor of Behavioral Decision Making at the University of Leeds Business School. She has previously held positions as a Career Development Fellow in Finance at the University of Oxford’s Saïd Business School and completed her Ph.D. in Economics and Psychology at the University of Warwick in 2019. Dr. Quispe-Torreblanca's research interests lie in the fields of behavioural finance and economics. Her research explores how individuals make financial decisions, with a particular focus on the role of emotions, biases, and other behavioural factors. Her work has been published in several high-impact academic journals, including Management Science, Nature Human Behaviour, and Personality and Social Psychology Bulletin.