Why Investors Are Irrational

1.Cultural Differences in Investing

  • International differences in loss aversion. After controlling for factors such as national wealth and growth, a study found that Anglo-Saxon countries are the most tolerant of loss, while investors in eastern Europe have the greatest loss aversion.
  • International differences in investor patience. The same study found that investors from Germanic/Nordic countries (85%), Anglo/American countries, Asia (66-68%), and Middle East cultures are more willing to wait.