{"id":2003391,"date":"2014-09-09T13:17:50","date_gmt":"2014-09-09T07:47:50","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=2003391"},"modified":"2014-09-09T13:17:50","modified_gmt":"2014-09-09T07:47:50","slug":"friends-may-portfolios-worst-enemy","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2014\/09\/09\/friends-may-portfolios-worst-enemy\/","title":{"rendered":"Your Friends may be your Portfolio&#8217;s worst Enemy"},"content":{"rendered":"<p>Consider this:<\/p>\n<ul>\n<li>People who live near each other increase their ownership of stocks around the same time.<\/li>\n<li>401(k) investors put more money into stocks when their co-workers have recently earned high returns that way.<\/li>\n<li>Mutual-fund managers are more likely to invest in a company when other stock-pickers in the same city are also buying it.<\/li>\n<\/ul>\n<p>Nobel Prize-winning economist Robert Shiller found that for 62% of individual investors and a shocking 75% of institutional investors, the decision to invest in stocks with hot recent returns had nothing to do with a &#8220;systematic search.&#8221;<\/p>\n<p>Instead, these investors seemed to chase whatever grabbed their attention the most because other people were talking about it.<\/p>\n<p>And it is not only in investing. &#8220;Group attention&#8221; &#8211; the experience of simultaneous co-attention with one\u2019s group members &#8211; increases emotional intensity relative to attending alone. Greater fear, gloom, and glee is a result from group attention to scary, sad, and happy events, respectively.<\/p>\n<p>Individuals come to feel more when they are together.<\/p>\n<p>Sources:<\/p>\n<ul>\n<li><a style=\"font-style: normal\" href=\"http:\/\/online.wsj.com\/articles\/intelligent-investor-can-peers-burn-holes-in-your-portfolio-1410003383\" target=\"_blank\">Can Peers Burn Holes In Your Portfolio?<\/a><\/li>\n<li><a style=\"font-style: normal\" href=\"http:\/\/f.cl.ly\/items\/1G3Q35212n3V3a1f0H07\/GSHTEYNBERG_.pdf\" target=\"_blank\">Feeling More Together: Group Attention Intensifies Emotion<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Consider this: People who live near each other increase their ownership of stocks around the same time. 401(k) investors put more money into stocks when their co-workers have recently earned high returns that way. Mutual-fund managers are more likely to invest in a company when other stock-pickers in the same city are also buying it. &hellip; <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3471,9],"tags":[3251],"class_list":["post-2003391","post","type-post","status-publish","format-standard","hentry","category-investing-insight","category-your-money","tag-behavioral-finance","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2003391","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=2003391"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2003391\/revisions"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=2003391"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=2003391"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=2003391"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}