One Night Stand Investment

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.

BREAKING DOWN '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. Regret Theory

    A theory that says people anticipate regret if they make a wrong ...
  2. Panic Buying

    A type of behavior marked by a rapid increase in purchase volume ...
  3. Regret Avoidance

    A theory of investor behavior that attempts to explain why investors ...
  4. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
  5. Investment Securities

    Securities that are purchased in order to be held for investment. ...
  6. Investing

    The act of committing money or capital to an endeavor with the ...
Related Articles
  1. Investing

    Understanding Long-Term Investments

    Long-term investments are intended to be held for more than a year.
  2. Trading

    Understanding Investor Behavior

    Discover how some strange human tendencies can play out in the market, posing the question: are we really rational?
  3. Investing

    8 Common Biases That Impact Investment Decisions

    Behavioral biases hit us all as investors and can vary depending upon our investor personality type.
  4. Trading

    4 Behavioral Biases And How To Avoid Them

    Here are four common common behavioral biases for traders and how to minimize their effects on your portoflio.
  5. Managing Wealth

    Portfolio Growth Strategies

    There are many ways to grow a portfolio, and the best approach for a given investor will depend upon various factors.
  6. Trading

    Removing The Barriers To Successful Investing

    Learn how to stop using emotion and bad habits to make your stock picks.
  7. Managing Wealth

    7 Investing Mistakes And How To Avoid Them

    No investor is flawless. Here are some common investing fallacies and a step-by-step guide on how to avoid them.
  8. Investing

    3 Reasons To Not Sell After a Market Downturn

    Find out the reasons that it is not a good idea to sell after a market downturn. There are lessons to be learned from the last major market downturn.
  9. Markets

    What's an Investment?

    An investment is an asset purchased with the expectation that it will generate income or appreciate over time. In finance, common investments include stocks, bonds, real estate, mutual funds ...
  10. Investing

    When To Sell Stocks

    Buying at the right price determines profit, but selling at the right price locks it in.
RELATED FAQS
  1. Which financial instruments have par values?

    Understand the difference between short-term investments and marketable equity securities, and learn the importance of short-term ... Read Answer >>
  2. How can a company trade more shares in one day than there are shares outstanding? ...

    The number of shares traded in a single day can be greater than the number of a company's outstanding shares, but this is ... Read Answer >>
  3. How do I create a trading strategy when a stock doesn’t reach a lower swing?

    Learn how investing in a corporate bond is different from purchasing shares of a company's stock while reviewing the benefits ... Read Answer >>
  4. What are the characteristics of a marketable security?

    Find out what it takes for a financial asset to be considered a marketable security, including its liquidity, intent of use ... Read Answer >>
  5. Is it possible to be perfectly hedged against risk?

    Learn what it means to mitigate the market risk of a portfolio through hedging and to what extent hedging can reduce downside ... Read Answer >>
  6. Are mutual funds considered equity securities?

    Find out why mutual funds, like stocks, are equity securities, including the similarities and differences between investing ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center