Investor Behavior Research Papers - Academia.edu (original) (raw)

Satisfaction is an important measure of the desired level of happiness. The achievement of the desired financial level in order to achieve the happiness of life for the individual is symbolized by financial satisfaction. The behaviors... more

Satisfaction is an important measure of the desired level of happiness. The achievement of the desired financial level in order to achieve the happiness of life for the individual is symbolized by financial satisfaction. The behaviors undertaken by the individual can be a trigger for improvement in satisfaction. Investment and ethics are mutually beneficial relationships. Investment decision-making by investors will be measured ethically. Based on that, this research focused on analysis of the influence of investment ethics on the behavior of capital market investors and its impact on capital market investors' financial satisfaction. The research showed that investment ethics affected financial satisfaction, investment ethics also affected investor behavior. Moreover, investor behavior influenced financial satisfaction. This research also indicated that investment ethics influenced financial satisfaction with investor behavior as intervening.

In India, an individual investor generally invests their money in bank deposits, which do not offer a hedge against inflation and often have negative real returns due to inflation. The last few years have been very significant for the... more

In India, an individual investor generally invests their money in bank deposits, which do not offer a hedge against inflation and often have negative real returns due to inflation. The last few years have been very significant for the Indian mutual fund industry in terms of expansion and avenue for investments. But still, mutual funds investments have not been a favorable investment options as compared to other investment options. Thus, it is a cause of concern to the financial market and portfolio managers. This calls for better understanding of the investment behavioral patterns of mutual funds investors. A Mutual Fund is an investment medium that pools funds from various investors and invests the funds in stocks, bonds, short-term money-market instruments, other securities or assets or some combination of these investments. The primary goal behind investment in mutual fund is to earn goods return with comparatively low risk. The main objective of the study is to examine the investor’s behavior towards mutual fund investment. This research investigates Investment Behavior of selected sample drawn from Rayalaseema region of Andhra Pradesh State to find out factors that influence investors’ choice of mutual funds. A sample of 150 individual investors has been selected for this purpose. Statistical tools like Percentage Analysis, Chi-Square Test and ANOVA Technique were used to analysis the collected data.

Marketing actions can impact firm value through both product and capital markets. Recent literature in finance suggests that in addition to systematic market risk, liquidity risk–the non-diversifiable systematic risk that a firm’s stock... more

Marketing actions can impact firm value through both product and capital markets. Recent literature in finance suggests that in addition to systematic market risk, liquidity risk–the non-diversifiable systematic risk that a firm’s stock may become illiquid in times of market stress–is also priced. The authors examine a large panel of more than 1,800 firms from 1971 to 2005 and show that advertising lowers liquidity risk by increasing the number of individual investors in a firm. The impact of higher advertising on liquidity risk is more pronounced for firms that are younger, operate in BtoC markets, and have advertising expenditures between about $ .5 million and $ 20 million. Simulations show that increasing advertising expenditures by 25% increases firm value by up to 1.4% just due to a reduction in liquidity risk. Overall, the results suggest that, in addition to the product market impacts, researchers and managers should consider the valuation impact of marketing activities via their effect on investors in capital markets.

Widely-cited research by Kamstra et al. (2003) argues that changes in mood resulting from Seasonal Affective Disorder (SAD) drive changes in investor risk aversion and cause seasonal patterns in aggregate stock returns around the world.... more

Widely-cited research by Kamstra et al. (2003) argues that changes in mood resulting from Seasonal Affective Disorder (SAD) drive changes in investor risk aversion and cause seasonal patterns in aggregate stock returns around the world. In this paper we reexamine the so-called SAD effect by replicating and extending Kamstra et al. (2003). We study the psychological underpinnings of the SAD hypothesis and show that the time-series predictions of the SAD model do not correspond to the seasonal patterns in depression found in the general population. We also investigate the cross-sectional prediction that SAD has a greater effect on stock markets in countries where SAD is more prevalent and find no relation between the prevalence of SAD and stock returns. Finally, we document that the SAD effect is mechanically driven by an overlapping dummy-variable specification and higher returns around the turn of the year.

Decisions of an individual or investors’ financial decisions are affected by behavioral or cognitive factors and not just knowledge. Decision-making is not in every case rational by nature. Investors make irrational decisions many times... more

Decisions of an individual or investors’ financial decisions are affected by behavioral or cognitive factors and not just knowledge. Decision-making is not in every case rational by nature. Investors make irrational decisions many times due to the influence of various cognitive factors. Moreover, the ongoing Covid-19 pandemic has added to the uncertainty around us. Every possible sector of business has been affected by it including financial markets. Aberration in investor behavior during this phase has also been observed and has led to deterrence in investors’ financial decisions. The present study intends to focus on analyzing empirically and ascertain the impact of Covid-19 on the behavioral & cognitive aspects of financial investment. Primary data has been used for the purpose and was collected by distributing a structured questionnaire among the participating investors chosen by using the convenience sampling method. The sample size of the study is 200 practicing individual investors. Statistical tools like Descriptive Statistics, Correlation, Reliability, and Multiple Regression Analysis were employed for analyzing the data. In this paper, it is found that herd behavior lacks consistency and significance with anchoring having the highest impact on financial decisions taken by investors. The framing effect also has a very high influence on the financial decision-making process of investors. This research will be useful for the government and the policymakers in the country, brokerage houses, retail investors, financial analysts, and asset management companies. As Covid-19 is a time-bound phenomenon, financial decisions of investors may change when the situation normalizes.

Ignoring endogeneity when assessing investors’ decisions carries the risk of biased estimates for the influence of exogeneous marketing variables. This study shows how to overcome this challenge by using Pólya trees in the quantification... more

Ignoring endogeneity when assessing investors’ decisions carries the risk of biased estimates for the influence of exogeneous marketing variables. This study shows how to overcome this challenge by using Pólya trees in the quantification of impacts on investors’ decisions. A total of 2255 investors recruited for this study received and opened a digital marketing newsletter about investing daily. Given the nature of investors’ decisions characterized by heterogeneity and endogeneity, the response model is assessed with the Dirichlet process mixture and estimated with the Markov chain Monte Carlo method. Digital marketing substantially exceeds the impact of investor experience, but both have a significant positive impact on investors’ trading volume. Findings obtained with the Dirichlet process mixture as a flexible model indicate that digital marketing even with latent endogenous factors makes an underlying contribution to the investors’ actions in the stock market.