Hanging On to Losers and the Disposition EffectInvestors tend to hold on to stocks that have lost value and sell stocks that have risen in valueWe call this tendency the disposition effect.Researchers Hersch Shefrin and Meir Statman suggest that this effect arises due to investors’ increased willingness to take on risk in the face of possible lossesMay also reflect a reluctance to admit a mistake by taking the loss