One Night Stand Investment

AAA

DEFINITION of 'One Night Stand Investment'

A purchased security that was intended for a long-term investment, but is instead sold the next day. One night stand investments are often sold urgently on the trading day after purchase, because the investor regrets buying the shares to such a degree that fear and panic begin setting in. This can even lead to immediate, short-term losses. A one-night stand investment is typical of an indecisive investor, and is related to the field of behavioral finance.

INVESTOPEDIA EXPLAINS 'One Night Stand Investment'

Much can change overnight in a company and an industry. An investor who researches an investment and buys one day, feeling that the company and its future are strong, may be panic-stricken and ready to sell the next day when unexpected news threatens his or her perceptions of the security of his or her long-term investment. The incidents instigating the sudden sale can include many things, such as the company's profits missing their target, industry shifts, acquisitions and regulatory changes.

RELATED TERMS
  1. Coattail Investing

    An investment strategy in which investors mimic the trades of ...
  2. Buy And Hold

    A passive investment strategy in which an investor buys stocks ...
  3. Bo Derek

    A slang term used to describe a perfect stock or investment. ...
  4. Behavioral Finance

    A field of finance that proposes psychology-based theories to ...
  5. Nervous Nellie

    An investor who isn't comfortable with investing and the risks ...
  6. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
Related Articles
  1. Active Trading Fundamentals

    4 Psychological Traps That Are Killing Your Portfolio

    Sometimes your largest financial hurdle is our head. Learn about the common mind-traps that trip up investors.
  2. Active Trading Fundamentals

    An Introduction To Consensus Indicators

    Learn how the herd is almost always wrong, or at least late in jumping on the bandwagon.
  3. Active Trading Fundamentals

    An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.
  4. Investing

    Tips For Investors In Volatile Markets

    Find out what to look out for when trading during market instability.
  5. Active Trading Fundamentals

    How The Power Of The Masses Drives The Market

    Market psychology is an undeniably powerful force. Find out what you can do about it.
  6. Trading Strategies

    How To Avoid Emotional Investing

    Most investors buy high and sell low, but you can avoid this trap by using some simple strategies.
  7. Options & Futures

    Market Problems? Blame Investors

    Investors are only human, and their irrational behavior can often move the market.
  8. Active Trading Fundamentals

    Leading Indicators Of Behavioral Finance

    Discover how put-call ratios and moving averages can be used to analyze investor behavior.
  9. Chart Advisor

    Why Now is the Time for Food and Beverage Stocks

    As volatility rears its ugly head, it's natural to investigate stable sectors such as food and beverages. Here's an appropriately-named ETF to consider.
  10. Chart Advisor

    4 Big Stock Gainers: Hold or Sell?

    These four stocks saw big moves higher on March 17. Is it time to take profits or hold out for more. Here's what the charts say.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center