From "Puzzled Fund Investors," Page 46 Investors are twice as likely to sell a winning mutual fund, rather than sell a loser, according to a September research paper by three university professors. Nearly 40% of sales in the 32,000 accounts studied involved funds ranked in the top quintile of past annual returns. Less than 15% of sales involved funds inhabiting the bottom quintile.
"Selling winning funds, while holding your losers, is clearly an investment mistake," the researchers say. They imply this failure to sell laggards reflects the unwillingness of people to admit they messed up.