What makes investors trade?

A unique data set allows us to monitor the buys, sells, and holds of indivi duals and institutions in the Finnish stock market on a daily basis. With t his data set, we employ Logit regressions to identify the determinants of b uying and selling activity over a two-year period. We find evidence that in vestors are reluctant to realize losses, that they engage in tax-loss selli ng activity, and that past returns and historical price patterns, such as b eing at a monthly high or low, affect trading. There also is modest evidenc e that life-cycle trading plays a role in the pattern of buys and sells.