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.

  1. Panic Buying

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

    Regret avoidance is a theory used to explain the tendency of ...
  3. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
  4. Distressed Sale

    When property, stocks or other assets are sold in an urgent manner, ...
  5. Investment Securities

    Investment securities are securities (tradable financial assets, ...
  6. Overnight Return

    One of the two components of the total daily return generated ...
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