What it is:
Most investors have made decisions that they eventually regret. One-night-stand investments are simply decisions that investors regret sooner rather than later, turning what are supposed to be long-term investment, and not delivering up to expectations are some examples.into short-term ones. What causes the regret can vary widely: putting too much of one's portfolio in an , hearing bad news about the
One-night-stand investments are a topic that behavioral finance researchers often study.
How it works (Example):
Let's say John Doe goes to an stock.seminar that hypes the of a beverage company that sells juice formulations intended to improve sex drive. John listens to the presentation and is pretty impressed, so he invests $20,000 in the
The next day, John speaks to his financial advisor, who can't believe that he fell for such a terrible job. He urges John to get out of the stock, and he does. John's in the beverage company is a one-night-stand investment.
Why it Matters:
A one-night-stand investment is a security that was supposed to be a long-term investment but is sold after a short time.