000			03016cam a22003497 4500
001			w25542
003			NBER
005			20211020104244.0
006			m o d
007			cr cnu||||||||
008			210910s2019 mau fo 000 0 eng d
100	1		_aMeyer, Steffen.
245	1	0	_aFully Closed: _bIndividual Responses to Realized Gains and Losses / _cSteffen Meyer, Michaela Pagel.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2019.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w25542
500			_aFebruary 2019.
520	3		_aWe use transaction-level data of portfolio trades and holdings linked to checking, savings, and settlement account transactions and balances to explore how individuals respond to realized capital gains and losses. We exploit plausibly exogenous sales due to mutual fund liquidations for identification. Specifically, we estimate the marginal propensity to reinvest out of one dollar received from a forced liquidation, when the investor either achieved a gain or a loss relative to his or her initial investment. Theoretically, if individuals held optimized portfolios, the marginal propensity to reinvest out of forced sales should be 100%. Individuals should just reinvest all of their liquidity immediately into a fund with similar characteristics. Empirically, individuals reinvest 83% on average if the forced sale resulted in a gain, but only 40% in the event of a loss. If individuals do not reinvest, they keep a share of their newly found liquidity in cash, save it, or consume it. Such differential treatment of gains and losses is inconsistent with active rebalancing or tax considerations, but consistent with mental accounting and the idea that individuals treat realized losses differently than paper losses. We thus provide evidence for realization utility and effects (Barberis and Xiong, 2012; Imas, 2016) and that individuals do not appear to learn rationally from experiences in the stock market (Malmendier and Nagel, 2011; Koudijs and Voth, 2016).
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aD14 - Household Saving • Personal Finance _2Journal of Economic Literature class.
690		7	_aD90 - General _2Journal of Economic Literature class.
690		7	_aG41 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets _2Journal of Economic Literature class.
700	1		_aPagel, Michaela.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w25542.
856	4	0	_uhttps://www.nber.org/papers/w25542
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w25542
942			_2ddc _cW-PAPER
999			_c322580 _d281142