Professor of Finance and Investment at Cardiff Business School
The tendency of investors to forgo loss realization in favor of gain realization, also known as disposition effect, is found to be lower in a trading environment with salient information on current holdings. Using proprietary data from a fintech platform for social trading, we apply a differences-in-differences approach to analyze variation in trading behavior within and between portfolios as they become publicly visible. The disposition effect is present in our sample consistent with prior literature, but we show that it diminishes by about 35% when trades and holdings are unhidden. Our findings have important implications for fund management reporting practices, and are robust to survivorship bias, learning effects, level of assets under management and alternative explanations.
Arman Eshraghi joined Cardiff Business School in 2018 as a Professor of Finance and Chair of Finance and Investment. Formerly, he was at the University of Edinburgh Business School, and has held visiting positions at Manchester Business School and University College London. Prior to academia, Arman was a senior management consultant in the banking and telecom sectors. He holds PhD in Finance from the University of Edinburgh, and BSc in Electrical Engineering and MBA with distinction, both from Sharif University in Tehran. Arman is a Shimomura Fellow of the Development Bank of Japan, Fellow of the Centre for the Study of Decision-Making Uncertainty at UCL, Fellow of the Higher Education Academy, and Director of the Cardiff Corporate Governance Research Group. He is a Senior Editor of Finance Research Letters, an Associate Editor of the Global Finance Journal, and regularly reviews for other journals in the field.