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Dr. Sell lost his dental practice and his $250,000 home in Creve Coeur, Mo.
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They can't bring themselves to sell losing positions, even when the stock is still going down.
Did some so-called quants — investors who use sophisticated mathematical models in deciding what and when to buy and sell — lose their shirts?
The changes would replace firm rules with discretionary leeway on when to sell losing positions and how much stock to hold.
Mr. Wallman says folios allow investors to better manage their tax bill because they can sell losing positions to offset profits on winners.
Since the Israeli psychologists began studying loss aversion in the early nineteen-seventies, it has been used to explain a stunning variety of irrational behaviors, from the misguided decisions of investors — they refuse to sell losing stocks — to the stickiness of condo prices in the aftermath of a housing bubble.
With the success of Family Supper, Pomeroy and Hebb founded two restaurants in Portland; in spite of their popularity, food costs got out of control and they were forced to sell, losing hundreds of thousands of dollars of their investors' money.
Also, mutual funds are taxed on a fiscal year ending Oct. 31, so fund managers have incentive to sell losing stocks by that date.
For instance, a fund manager may sell losing positions in order to display only positions that have gained in value in their portfolio.
Sell losing investments and offset capital gains or income.
Last week, Atlanta-based SunTrust Banks Inc. (STI) said it would record $725 million of pretax charges to write down bad loans, buy back soured mortgages and sell losing investments.
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