Individual investors' tendency to trade too much based on the mistaken belief that they can pick winners and losers better than investment professionals is known as:

Question

Quizplus · Accepted Answer

The investor overconfidence hypothesis refers to the tendency of individual investors to trade too much based on their belief that they can pick winners and losers better than investment professionals. The disposition effect refers to the tendency of investors to hold onto losing investments too long and sell winning investments too soon. The investor attention hypothesis refers to the idea that investors tend to focus more on stocks that receive media attention. The excessive trading costs hypothesis suggests that high trading costs can lead to underperformance of individual investors. The investor mood hypothesis suggests that the mood of investors can affect their investment decisions.

Individual Investors' Tendency to Trade Too Much Based on the Mistaken