Gherzi, S., Egan, D., Stewart, N., Haisley, E., & Ayton, P. (2014). The meerkat effect: Personality and market returns affect investors' portfolio monitoring behavior. Journal of Economic Behavior & Organization, 107, 512-526. doi: 10.1016/j.jebo.2014.07.013

Karlsson, Loewenstein and Seppi (2009) found that, following market downswings, investors are less likely to login to monitor their retirement portfolios. They concluded that, rather like (apocryphal) ostriches sticking their heads in the sand, investors avoid unpleasant information by reducing portfolio monitoring in response to news of negative market movement. We apply generalized non-linear mixed effects models to test for this selective information monitoring at an individual level in a new sample of active online investors. We see different behavior in this new sample. We find that investors increase their portfolio monitoring following both positive and daily negative market returns, behaving more like hyper-vigilant meerkats than head-in-the-sand ostriches. This pattern persists for logins not resulting in trades and weekend logins when markets are closed. Moreover, an investor personality trait–neuroticism–attenuates the pattern of portfolio monitoring suggesting that market–driven variation in portfolio monitoring is attributable to psychological factors.

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