Claim: One-third of Investors Trade While Drunk

One-third of Investors Trade While Drunk. John Sullivan. 401k Specialist, August 12, 2021. https://401kspecialistmag.com/one-third-of-investors-trade-while-drunk

Drunk texting is humiliating, drunk trading is devastating. With a nod to target-date funds and their “set it and forget” nature that helps avoid emotional market moves, nearly a third of investors admit to trading while intoxicated, a potential portfolio-killing move.

The interesting survey, from consumer finance website MagnifyMoney, also finds that 66% of investors have regretted “an impulsive or emotionally charged” investing decision.

“One can imagine how trading apps make this easier than in the old days when an investor might have had to call their broker from the bar,” writes MagnifyMoney’s Kamaron McNair. “Younger investors admit to falling into this trap much more frequently than older traders, with 59% of Gen Zers admitting to drinking and trading, versus just 9% of baby boomers.”

Among the findings

.    66% of investors have made an impulsive or emotionally charged investing decision they later regretted. This is more common for Gen Zers (85%) and millennials (73%) than Gen Xers (60%) and baby boomers (54%).

.    32% of investors have traded while drunk. This includes 59% of Gen Z investors who have bought or sold an investment while inebriated — more than any other age group.

.    Consumers who manage their portfolios generally have a harder time keeping emotions out of investing than those who rely on a financial advisor. Those who self-manage their investments report higher rates of lost sleep and regrettable decisions than those who use an advisor.

.    Most investors (58%) agree their portfolio performs better when emotions are left out of the equation, but that’s easier said than done. Nearly half (47%) report difficulties keeping emotions out of investing decisions.

.    37% of investors have lost sleep worrying about the stock market, and 30% have cried over investing. The top reasons for tears include losing money in the stock market (43%), feeling overwhelmed (36%), and selling too early (34%).