Research from the American Economic Association shows that investors are generally more likely to sell a security when they have a gain rather than a loss, even if holding onto the "loser" is financially detrimental.
Research on "sell or buy" decisions often falls into two categories: using AI and behavioral economics studying human bias.
A 2023 study found that investors who make "sell or buy" decisions together (with family or friends) are significantly less overconfident and make better choices than those deciding alone. sell or buy
Research explores how external "noise" dictates trading signals.
Interestingly, some research suggests that having less money (leverage constraints) can actually improve outcomes because it forces investors to sell losing assets sooner to fund new opportunities, rather than holding on to them indefinitely. 3. Market Sentiment Influences Research from the American Economic Association shows that
One of the most notable "deep" papers in the technical domain is "Deep Stock Trading: A Hierarchical Reinforcement Learning Framework for Portfolio Optimization and Order Execution", which uses complex AI policies to decide both what to trade (the high-level portfolio) and how to execute the buy/sell orders (the low-level timing). 1. AI and Deep Learning Models
A popular approach where a "trader agent" learns to maximize profits through trial and error. Papers in this field often define actions simply as -1 (sell), 0 (hold), and 1 (buy). Market Sentiment Influences One of the most notable
Deep academic dives into why humans choose to buy or sell reveal significant psychological biases.