{
  "id": 9195073,
  "title": "Cash flow lessons help individual investors look beyond reported earnings",
  "url": "https://urgent.news/2026/09/22/cash-flow-lessons-help-individual-investors-look-beyond-reported",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-22T20:20:09.000Z",
  "source": {
    "name": "Phys.org",
    "slug": "phys-org",
    "url": "https://phys.org/news/2026-09-cash-lessons-individual-investors.html"
  },
  "original_language": "en",
  "account": "A new study reveals that individual investors, or retail investors, are more likely to lose money in the stock market when they do not understand the difference between a company's reported earnings and its actual cash flows. A joint research project from Lingnan University and other institutions discovered that when retail investors receive education that combines basic accounting concepts with practical analytical methods, they make better investment decisions. This education led to higher returns and less frequent purchases of stocks based solely on reported earnings. The research, published in the Journal of Accounting and Economics, involved over 4,600 Chinese and U.S. stocks. Social media was used to educate investors on the concepts and analytical methods, with about 30 million views recorded. The study showed that comprehensive education significantly reduced the tendency for stock prices to rise and then fall after earnings announcements, compared to a control group. Retail investors in both China and the U.S. bought fewer stocks around earnings announcements after receiving the full education. Targeted education in regions with lower financial literacy also had a stronger effect on investor judgment.",
  "summary": "Why are individual investors, commonly known as \"retail investors,\" prone to losing money in the stock market? A Lingnan University joint study of more than 4,600 Chinese and U.S. stocks finds that investors are less likely to buy stocks blindly when they understand the difference between a company's \"reported earnings\" and its \"actual cash flows.\"",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}