Disposition effect, demographics and risk taking

Purpose This study aims to investigate the association of demographic characteristics, market conditions and risk taking with disposition effect using data on Brazilian individual investors. Design/methodology/approach uses a unique set monthly from June 2007 February 2017 provided by one largest asset management firms in Brazil. paper computes proportion gains realized losses see if investors incur effect. then performs logistic regressions verify between investors’ effects portfolio characteristics. analyses prevalence cognitive biases depending (bull or bear markets) include class as robustness checks. Findings finds evidence that averse are more prone effect, male subjects less this bias age is not associated observes tendency decreases during bull markets but increases markets. Also, sophisticated selling winning assets holding losses. Research limitations/implications First, based highest lowest prices month price at moment sale occurred. Second, had access only end-of-month information, actual daily trading records. Third, because relates who trade investment funds, cannot determine whether firm size Fourth, may necessarily be proxy for investor experience, so should interpret lack significance terms generational differences. Practical implications demonstrates prevalent even among wealthier educated delegated classes. also presents characteristics considering liquidity-constrained, highly volatile developing market. Social gender an important characteristic understand sophistication attenuation factor liquidity-constrained Originality/value first analyse role explain real information level about It intensity economy.