A one night stand investment can be defined as a bought stock that was meant for a long-term investment, however is rather sold very quickly, a lot of the times as soon as the following day.
One night stand investments are frequently sold desperately on the trading day after buy, in light of the fact that the investor regrets purchasing the stocks to such an extent that dread and panic start setting in.
This can even result in to immediate, short-term losses.
A one-night stand investment is run of the mill of a confused investor and is identified to the subject matter of behavioral finance.
A lot can change over a night in an organization and an industry.
A speculator who looks into an investment and purchases one day, thinking that the organization and its future are solid, might be panic-stricken and prepared to sell the following day when unexpected news undermines their impression of the stock of their long-term investment.
An instance of a one night stand investment could be Jim, a young investor who is thrilled regarding a friend’s new upcoming organization and buys $50,000 in securities in the organization on a Tuesday afternoon.
The following morning, however, Jim awakens and understands that he has committed a grave error and is filled with dread about investing such a great amount in his friend’s organization.
He quickly attempts to sell off his share in the securities, not understanding that such an sudden and critical sale could really harm the stake of the organization and cause panic in other investors as well.