Navigation Links
Investors who 'gamble' in the stock market have same characteristics as lottery players

AUSTIN, TexasThe socioeconomic characteristics of people who play state lotteries are similar to investors who pick stocks with a lottery qualityhigh risk with a small potential for high return, and just like the lottery, returns on average are lower for those who invest this way in the stock market, research from The University of Texas at Austin shows.

In the paper, "Who Gambles in the Stock Market?" Alok Kumar, assistant professor of finance at the McCombs School of Business at The University of Texas at Austin, presents evidence of this counter-productive stock-market behavior after studying the demographics and financial transactions of 70,000 anonymous investors. The research will be published in a forthcoming issue of the Journal of Finance.

"We found that people who took risks with lottery-type stock typically earned 2 to 3 percent less than other investors," Kumar said.

Kumar defines lottery-type stocks as those with a share price under $5 and a history of high volatility and extreme positive returns. These stocks are inexpensive and come with a high chance of losing, but they also offer the small potential for a big payoff.

Kumar's research found that people with household income below average for their area are more likely to buy lottery-type stocks, and that they are purchased in areas with high unemployment and during economic downturns. In addition, regions with higher concentrations of Catholics such as in Massachusetts and Rhode Island have a stronger preference for lottery-type stocks, while those in Protestant regions like areas in the South are less drawn to thema pattern that also mirrors ticket-purchasing trends in state lotteries by the two groups.

"It is particularly important to be aware of our gambling tendencies now because the urge to gamble is greater during difficult economic times," Kumar said. "Stock market 'gambles' are unlikely to pay off, and those who are close to retirement are likely more vulnerable to this urge because they might feel they only have a short time period to recoup their losses. Unfortunately, this behavior can further worsen their situation and delay recovery."


Contact: Rob Meyer
University of Texas at Austin, McCombs School of Business

Related medicine news :

1. Torchmark Corporation to Present at Merrill Lynch Insurance Investors Conference
2. Obama Reforms Could Spark New Healthcare Economy If Investors Increase Funding, Says Leading Healthcare Venture Firm
3. CardioDynamics Announces Investors Retain $5.25 Million 8% Convertible Debt Securities
4. 2009: The Year of Health Care Reform? Faith-Based Investors See Doubling of Related Shareholder Resolutions, Growing Public Support From Corporate America
5. Rcadia Medical Imaging Closes $3.3 Million Investment Led by BioVentures Investors
6. OneMedPlace announces panels for "OneMedForum 2009: Disrupters and Drivers in Eight Areas of Medical Technology" -- CEOs and investors to meet in unique format of focused sessions
7. Law Offices of Howard G. Smith Announces Class Action Lawsuit on Behalf of Investors of PharmaNet Development Group, Inc.
8. Evidence-Based Investing: M.D. Turned Financial Advisor Diagnoses What Ails Most Investors
9. Hanger Orthopedic Group, Inc. Receives Positive Outlook from Moodys Investors Service
10. Zix Corporation to Present to Investors at RBC Capital Markets Technology, Media and Communications Conference
11. Charterhouse Group Partners with MTS Health Investors and Highlander Partners to Acquire Chamberlin Edmonds & Associates, Inc., a Leading Provider of Eligibility Services to Hospitals
Post Your Comments:
(Date:11/27/2015)... MINNEAPOLIS, Minn. (PRWEB) , ... November 27, 2015 ... ... you start failing. Secura Consultants has prided itself for not only fulfilling the ... best income protection solutions at an affordable price and providing top-tier customer service. ...
(Date:11/27/2015)... CA (PRWEB) , ... November 27, 2015 , ... ... on Accreditation of Allied Health Education Programs (CAAHEP) awarded accreditation to its Diagnostic Medical ... of CAAHEP accredited colleges, as only one of twelve colleges and universities in the ...
(Date:11/27/2015)... ... ... Dr. Thomas Dunlap and Dr. Patrick Coleman , cardiologist ... Medicine at St., Joseph Health System’s Santa Rosa Memorial Hospital , co-hosted the ... ways and require time-critical intervention to avoid large area heart damage and progressive infections ...
(Date:11/27/2015)... (PRWEB) , ... November 27, 2015 , ... ... contact center software Q-Suite, announces the incorporation of Asterisk 11 LTS (Long Term ... fully supported Asterisk 11 LTS brings Q-Suite 5.10 up-to-date with a version of ...
(Date:11/26/2015)... ... , ... Inevitably when people think Thanksgiving, they also think Holiday sales and ... Friday and Cyber Monday massage chair sales to receive the best pricing ... to find the best massage chair deals, they can see all of the coupons ...
Breaking Medicine News(10 mins):
(Date:11/26/2015)... DUBLIN , November 26, 2015 ... has announced the addition of the  ... in the European Cell Surface Marker ... Emerging Opportunities"  report to their offering.  ... announced the addition of the  "2016 ...
(Date:11/25/2015)...  Amgen (NASDAQ: AMGN ) today announced the ... the United States (U.S.) Food and ... to Humira ® (adalimumab). Amgen believes this submission ... FDA and represents Amgen,s first BLA submission using the ... M.D., executive vice president of Research and Development at ...
(Date:11/25/2015)... 25, 2015 AAIPharma Services Corp./Cambridge Major ... at least $15.8  Million to expand its laboratories ... . The expansion will provide additional office ... growing demands of the pharmaceutical and biotechnology markets. ... will provide up to 40,000 square feet of ...
Breaking Medicine Technology: