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I attached the article. You need to read it, summarize it, and write a  summary report. 

I need 5 pages Summary Report. Due tomorrow.No Plagirism

Are Investors Reluctant to Realize
Their Losses?

TERRANCE ODEAN*

ABSTRACT

I test the disposition effect, the tendency of investors to hold losing investments too
long and sell winning investments too soon, by analyzing trading records for 10,000
accounts at a large discount brokerage house. These investors demonstrate a strong
preference for realizing winners rather than losers. Their behavior does not appear
to be motivated by a desire to rebalance portfolios, or to avoid the higher trading
costs of low priced stocks. Nor is it justif ied by subsequent portfolio performance.
For taxable investments, it is suboptimal and leads to lower after-tax returns.
Tax-motivated selling is most evident in December.

T too long and sell winners too soon has beenHE TENDENCY TO HOLD LOSERS

labeled the disposition effect by Shefrin and Statman 1985 . For taxable~ !

investments the disposition effect predicts that people will behave quite dif-
ferently than they would if they paid attention to tax consequences. To test
the disposition effect, I obtained the trading records from 1987 through 1993
for 10,000 accounts at a large discount brokerage house. An analysis of these
records shows that, overall, investors realize their gains more readily than
their losses. The analysis also indicates that many investors engage in tax-
motivated selling, especially in December. Alternative explanations have been
proposed for why investors might realize their profitable investments while
retaining their losing investments. Investors may rationally, or irrationally,
believe that their current losers will in the future outperform their current

*University of California, Davis. This paper is based on my dissertation at the University of
California, Berkeley. I would like to thank an anonymous referee, Brad Barber, Peter Klein,
Hayne Leland, Richard Lyons, David Modest, John Nofsinger, James Poterba, Mark Rubinstein,
Paul Ruud, Richard Sansing, Richard Thaler, Brett Trueman, and participants at the Berkeley
Program in Finance, the NBER behavioral f inance meeting, the Financial Management Asso-
ciation Conference, the American Finance Association meetings, and seminar participants at
UC Berkeley, the Yale School of Management, the University of California, Davis, the Univer-
sity of Southern California, the University of North Carolina, Duke University, the Wharton
School, Stanford University, the University of Oregon, Harvard University, the Massachusetts
Institute of Technology, the Amos Tuck School, the University of Chicago, the University of
British Columbia, Northwestern University, the University of Texas, UCLA, the University of
Michigan, and Columbia University for helpful comments. I would also like to thank Jeremy
Evnine and especially the discount brokerage house that provided the data necessary for this
study. Financial support from the Nasdaq Foundation is gratefully ac

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