An Empirical Analysis Of The Behavioural Factors Affecting Individual Investment Decisions

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An Empirical Analysis of the Behavioural Factors Affecting Individual Investment Decisions

Author : Shilpi
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis An Empirical Analysis of the Behavioural Factors Affecting Individual Investment Decisions by : Shilpi

Download or read book An Empirical Analysis of the Behavioural Factors Affecting Individual Investment Decisions written by Shilpi and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Behaviour finance is an evolving field that studies how behavioural factors affect investment decision making by the individuals. This study attempts to identify the behavioural factors that influence investment decisions of the investors. Hypotheses were formulated to study the behavioural factors and the variation in these factors across different demographic variables. Behavioural factors such as herd behaviour, overconfidence were identified using factor analysis. Socially responsible investing is a new form of investing. Awareness among the investors about socially responsible investing was also assessed separately in the study. Socially responsible investing (SRI) is any investment strategy which seeks to consider both financial return and social good while making investment decisions.

Investor Behavior

Author : H. Kent Baker
Publisher : John Wiley & Sons
ISBN 13 : 1118492986
Total Pages : 645 pages
Book Rating : 4.1/5 (184 download)

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Book Synopsis Investor Behavior by : H. Kent Baker

Download or read book Investor Behavior written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2014-02-10 with total page 645 pages. Available in PDF, EPUB and Kindle. Book excerpt: WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.

Behavioral Finance

Author : H. Kent Baker
Publisher : John Wiley & Sons
ISBN 13 : 0470499117
Total Pages : 773 pages
Book Rating : 4.4/5 (74 download)

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Book Synopsis Behavioral Finance by : H. Kent Baker

Download or read book Behavioral Finance written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2010-10-05 with total page 773 pages. Available in PDF, EPUB and Kindle. Book excerpt: A definitive guide to the growing field of behavioral finance This reliable resource provides a comprehensive view of behavioral finance and its psychological foundations, as well as its applications to finance. Comprising contributed chapters written by distinguished authors from some of the most influential firms and universities in the world, Behavioral Finance provides a synthesis of the most essential elements of this discipline, including psychological concepts and behavioral biases, the behavioral aspects of asset pricing, asset allocation, and market prices, as well as investor behavior, corporate managerial behavior, and social influences. Uses a structured approach to put behavioral finance in perspective Relies on recent research findings to provide guidance through the maze of theories and concepts Discusses the impact of sub-optimal financial decisions on the efficiency of capital markets, personal wealth, and the performance of corporations Behavioral finance has quickly become part of mainstream finance. If you need to gain a better understanding of this topic, look no further than this book.

Determinants of Retail Investors Behaviour and Its Impact on Investment Decision

Author : Abey Francis
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Determinants of Retail Investors Behaviour and Its Impact on Investment Decision by : Abey Francis

Download or read book Determinants of Retail Investors Behaviour and Its Impact on Investment Decision written by Abey Francis and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: According to economic theorists, investors think and behave “rationally” when buying and selling stocks. Generally investors are presumed to use all available information to form “rational expectations” in investment decision making. In reality, individual investors do not think and behave rationally. To the contrary, driven by greed and fear, investors speculate stocks between unrealistic highs and lows. They are misled by extremes of emotion, subjective thinking and the herd mentality. Indian stock market is considered to be highly volatile, sensitive and reactive to unanticipated shocks and news. At the same time, Indian stock market is resilient and it recovers soon after shocks. The role and importance of individual investors and their trading behaviour is not properly discounted. It is believed that trading behaviour of individual investors rarely influences the stock prices. The paper intends to analyse the determinants of the individual investor behaviour of Indian stock market and factors affecting their investment decisions. An empirical study is conducted to analyse the investment behaviour and decision making style of individual investors. Analytical Hierarchy Process (AHP) is used to find the relative importance of different behavioural traits of the investors.

Investment Behaviour

Author : Arup Kumar Sarkar
Publisher : Emerald Group Publishing
ISBN 13 : 1787562808
Total Pages : 190 pages
Book Rating : 4.7/5 (875 download)

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Book Synopsis Investment Behaviour by : Arup Kumar Sarkar

Download or read book Investment Behaviour written by Arup Kumar Sarkar and published by Emerald Group Publishing. This book was released on 2018-07-16 with total page 190 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investment Behaviour explores the relationship between competing demographic factors, personal awareness and perceived attitudes to risk in shaping the behaviour of individual investors in the stock market. By so doing, the book facilitates the formulation of more individual-centered financial policy.

Determining the Factors Affecting Individual Investors' Behaviours

Author : Sevilay USLU DİVANOĞLU
Publisher :
ISBN 13 :
Total Pages : 16 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Determining the Factors Affecting Individual Investors' Behaviours by : Sevilay USLU DİVANOĞLU

Download or read book Determining the Factors Affecting Individual Investors' Behaviours written by Sevilay USLU DİVANOĞLU and published by . This book was released on 2019 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: Behavioral finance is precisely non-rational behavior of market investors. Behavioral finance theory shows that investors make investment decisions rationally, by intermittent change from the past and that investment decisions can be taken under the influence of some psychological factors. This theory shows how human behaviors are effective in the functioning of investment decisions and that investment decisions can be made in nonrational behaviors. People are determined to invest under the influence of emotions and personal intuitions with models based on rational behavior and investment behaviors. Whether individuals are rational in the economic decision-making process is one of the key points of debate and it seems quite complex to be able to demonstrate this. This study will focus on individuals (investors), one of the economic decision makers. Socio-economic factors, as well as psychological factors, influence the risk that investors perceive in the decision-making process of individual investors. The purpose of this study is to identify stimuli that affect individual investors' drivers of financial investment decisions and to consider it in terms of behavioral finance. For this purpose, an individual investor questionnaire has been determined in the field which has previously been validated and reliable. This questionnaire was applied to 200 employees working in private and public banks operating in Aksaray and 177 people were provided feedback. In the case of Aksaray, it has been determined which stimulants are under the influence of predictions, estimates, emotions, personal intuitions, psychological and sociological behaviors of investment decision-making individuals.

Behavioral Finance and Wealth Management

Author : Michael M. Pompian
Publisher : John Wiley & Sons
ISBN 13 : 1118046315
Total Pages : 393 pages
Book Rating : 4.1/5 (18 download)

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Book Synopsis Behavioral Finance and Wealth Management by : Michael M. Pompian

Download or read book Behavioral Finance and Wealth Management written by Michael M. Pompian and published by John Wiley & Sons. This book was released on 2011-01-31 with total page 393 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Pompian is handing you the magic book, the one that reveals your behavioral flaws and shows you how to avoid them. The tricks to success are here. Read and do not stop until you are one of very few magicians." —Arnold S. Wood, President and Chief Executive Officer, Martingale Asset Management Fear and greed drive markets, as well as good and bad investment decision-making. In Behavioral Finance and Wealth Management, financial expert Michael Pompian shows you, whether you're an investor or a financial advisor, how to make better investment decisions by employing behavioral finance research. Pompian takes a practical approach to the science of behavioral finance and puts it to use in the real world. He reveals 20 of the most prominent individual investor biases and helps you properly modify your asset allocation decisions based on the latest research on behavioral anomalies of individual investors.

The Behavioral Investor

Author : Daniel Crosby
Publisher : Harriman House Limited
ISBN 13 : 0857196871
Total Pages : 280 pages
Book Rating : 4.8/5 (571 download)

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Book Synopsis The Behavioral Investor by : Daniel Crosby

Download or read book The Behavioral Investor written by Daniel Crosby and published by Harriman House Limited. This book was released on 2018-10-16 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt: From the New York Times bestselling author of the book named the best investment book of 2017 comes The Behavioral Investor, an applied look at how psychology ought to inform the art and science of investment management. In The Behavioral Investor, psychologist and asset manager Dr. Daniel Crosby examines the sociological, neurological and psychological factors that influence our investment decisions and sets forth practical solutions for improving both returns and behavior. Readers will be treated to the most comprehensive examination of investor behavior to date and will leave with concrete solutions for refining decision-making processes, increasing self-awareness and constraining the fatal flaws to which most investors are prone. The Behavioral Investor takes a sweeping tour of human nature before arriving at the specifics of portfolio construction, rooted in the belief that it is only as we come to a deep understanding of “why” that we are left with any clue as to “how” we ought to invest. The book is comprised of three parts, which are as follows: - Part One – An explication of the sociological, neurological and physiological impediments to sound investment decision-making. Readers will leave with an improved understanding of how externalities impact choices in nearly imperceptible ways and begin to understand the impact of these pressures on investment selection. - Part Two – Coverage of the four primary psychological tendencies that impact investment behavior. Although human behavior is undoubtedly complex, in an investment context our choices are largely driven by one of the four factors discussed herein. Readers will emerge with an improved understanding of their own behavior, increased humility and a lens through which to vet decisions of all types. - Part Three – Illuminates the “so what” of Parts One and Two and provides a framework for managing wealth in a manner consistent with the realities of our contextual and behavioral shortcomings. Readers will leave with a deeper understanding of the psychological underpinnings of popular investment approaches such as value and momentum and appreciate why all types of successful investing have psychology at their core. Wealth, truly considered, has at least as much to do with psychological as financial wellbeing. The Behavioral Investoraims to enrich readers in the most holistic sense of the word, leaving them with tools for compounding both wealth and knowledge.

Dividend Policy and Stock Price Volatility

Author : David E. Allen
Publisher :
ISBN 13 : 9781863422581
Total Pages : 36 pages
Book Rating : 4.4/5 (225 download)

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Book Synopsis Dividend Policy and Stock Price Volatility by : David E. Allen

Download or read book Dividend Policy and Stock Price Volatility written by David E. Allen and published by . This book was released on 1993 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Handbook of Consumer Finance Research

Author : Jing Jian Xiao
Publisher : Springer
ISBN 13 : 3319288873
Total Pages : 379 pages
Book Rating : 4.3/5 (192 download)

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Book Synopsis Handbook of Consumer Finance Research by : Jing Jian Xiao

Download or read book Handbook of Consumer Finance Research written by Jing Jian Xiao and published by Springer. This book was released on 2016-05-30 with total page 379 pages. Available in PDF, EPUB and Kindle. Book excerpt: This second edition of the authoritative resource summarizes the state of consumer finance research across disciplines for expert findings on—and strategies for enhancing—consumers’ economic health. New and revised chapters offer current research insights into familiar concepts (retirement saving, bankruptcy, marriage and finance) as well as the latest findings in emerging areas, including healthcare costs, online shopping, financial therapy, and the neuroscience behind buyer behavior. The expanded coverage also reviews economic challenges of diverse populations such as ethnic groups, youth, older adults, and entrepreneurs, reflecting the ubiquity of monetary issues and concerns. Underlying all chapters is the increasing importance of financial literacy training and other large-scale interventions in an era of economic transition. Among the topics covered: Consumer financial capability and well-being. Advancing financial literacy education using a framework for evaluation. Financial coaching: defining an emerging field. Consumer finance of low-income families. Financial parenting: promoting financial self-reliance of young consumers. Financial sustainability and personal finance education. Accessibly written for researchers and practitioners, this Second Edition of the Handbook of Consumer Finance Research will interest professionals involved in improving consumers’ fiscal competence. It also makes a worthwhile text for graduate and advanced undergraduate courses in economics, family and consumer studies, and related fields.

Financial Risk Tolerance: A Psychometric Review

Author : John E. Grable
Publisher : CFA Institute Research Foundation
ISBN 13 : 1944960201
Total Pages : 27 pages
Book Rating : 4.9/5 (449 download)

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Book Synopsis Financial Risk Tolerance: A Psychometric Review by : John E. Grable

Download or read book Financial Risk Tolerance: A Psychometric Review written by John E. Grable and published by CFA Institute Research Foundation. This book was released on 2017-06-30 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: This content provides financial analysts, investment professionals, and financial planners with a review of how financial risk-tolerance tests can and should be evaluated. It begins by clarifying terms related to risk taking and is followed by a broad overview of two important measurement terms: validity and reliability. It concludes with examples for practice.

Journal of Finance and Accountancy - Volume 26

Author : Jan Duggar Coeditor
Publisher :
ISBN 13 : 9781716374173
Total Pages : 214 pages
Book Rating : 4.3/5 (741 download)

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Book Synopsis Journal of Finance and Accountancy - Volume 26 by : Jan Duggar Coeditor

Download or read book Journal of Finance and Accountancy - Volume 26 written by Jan Duggar Coeditor and published by . This book was released on 2020-05-17 with total page 214 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Journal of Finance and Accountancy (JFA) publishes original, unpublished studies related to financial and accounting topics in business and education. Studies reflecting issues and solutions to concerns like budgeting, taxation, methods, investments, regulatory procedures, and business financial analysis based on actual performance are appropriate topics. All manuscripts submitted to JFA for publication consideration are double-blind peer reviewed. This journal has an acceptance rate of less than 35%.

Investing Psychology

Author : Tim Richards
Publisher : John Wiley & Sons
ISBN 13 : 1118722221
Total Pages : 256 pages
Book Rating : 4.1/5 (187 download)

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Book Synopsis Investing Psychology by : Tim Richards

Download or read book Investing Psychology written by Tim Richards and published by John Wiley & Sons. This book was released on 2014-04-01 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Discover how to remove behavioral bias from your investment decisions For many financial professionals and individual investors, behavioral bias is the largest single factor behind poor investment decisions. The same instincts that our brains employ to keep us alive all too often work against us in the world of finance and investments. Investing Psychology + Website explores several different types of behavioral bias, which pulls back the curtain on any illusions you have about yourself and your investing abilities. This practical investment guide explains that conventional financial wisdom is often nothing more than myth, and provides a detailed roadmap for overcoming behavioral bias. Offers an overview of how our brain perceives realities of the financial world at large and how human nature impacts even our most basic financial decisions Explores several different types of behavioral bias, which pulls back the curtain on any illusions you have about yourself and your investing abilities Provides real-world advice, including: Don't compete with institutions, always track your results, and don't trade when you're emotional, tired, or hungry Investing Psychology is a unique book that shows readers how to dig deeper and persistently question everything in the financial world around them, including the incorrect investment decisions that human nature all too often compels us to make.

Impact of Investment Decisions on Retail Investors

Author : Suyam Praba
Publisher : Meem Publishers
ISBN 13 : 9788830350564
Total Pages : 0 pages
Book Rating : 4.3/5 (55 download)

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Book Synopsis Impact of Investment Decisions on Retail Investors by : Suyam Praba

Download or read book Impact of Investment Decisions on Retail Investors written by Suyam Praba and published by Meem Publishers. This book was released on 2023-07-21 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Delves into the realm of financial psychology, focusing on the investment choices made by retail investors and the subsequent effects on their investment patterns. The research aims to explore the behavioral aspects that influence decision-making in the realm of investments and how these choices shape the overall investment strategies adopted by individual retail investors. It utilizes a comprehensive research framework to analyze the various psychological factors, cognitive biases, and emotional responses that drive investment decisions among retail investors. By examining these behavioral aspects, the researchers aim to uncover the underlying reasons behind specific investment patterns and their outcomes. Through a combination of surveys, interviews, and data analysis, the study seeks to provide valuable insights into the motivations, risk tolerance, and decision-making processes of retail investors. Additionally, it aims to identify common behavioral biases that might lead to suboptimal investment choices, thereby contributing to the body of knowledge in both finance and psychology. Ultimately, the research endeavors to offer recommendations and strategies to enhance the investment decision-making process of retail investors. By understanding the impact of psychological factors on investment behavior, the study aims to empower individual investors to make more informed and rational choices, ultimately improving their financial outcomes and overall investment performance. This study is a valuable contribution to the field of behavioral finance, bridging the gap between psychological insights and investment practices in the context of retail investors.

The Impact of Psychological Factors on Investment Decision Making of Investors

Author : Yamini Gupta
Publisher :
ISBN 13 :
Total Pages : 13 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Impact of Psychological Factors on Investment Decision Making of Investors by : Yamini Gupta

Download or read book The Impact of Psychological Factors on Investment Decision Making of Investors written by Yamini Gupta and published by . This book was released on 2016 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the traditional financial theory, the decision makers were assumed to be rational and stock markets were thought out to be the perfect markets i.e. whatever information is available in the market is fully reflected in share prices and nobody can earn extra profits just by having insider's information. On the contrary, modern theory proposes that investors' decision-making is not always propelled by these thoughts. In fact, the decisions taken by them are unpredictable sometimes. Moreover, there are many studies which have shown that investors' decisions are influenced by numerous psychological factors. The present research aims at determining the various psychological factors that have an influence on investor's decision making in Indian stock market. In the present article, data was collected from 380 retail investors who are further segregated in two groups on the basis of their investment experience. Four behavioral biases namely loss aversion bias, regret aversion bias, herding bias and anchoring bias are considered and analysed using discriminant analysis and chi-square test. It was found that herding bias was exhibited by both the groups in an equally likely manner. Further, experienced investors were found to be more prone to loss aversion bias, regret aversion bias and anchoring bias as compared to that of less experienced investors.

Behavioural Influence on Investment Decision by Residents & Non Residents of India

Author : Dr Gayathri T
Publisher : Archers & Elevators Publishing House
ISBN 13 : 9394958231
Total Pages : 154 pages
Book Rating : 4.3/5 (949 download)

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Book Synopsis Behavioural Influence on Investment Decision by Residents & Non Residents of India by : Dr Gayathri T

Download or read book Behavioural Influence on Investment Decision by Residents & Non Residents of India written by Dr Gayathri T and published by Archers & Elevators Publishing House. This book was released on with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Value of Trust

Author : Valentin Schellhaas
Publisher : Cuvillier Verlag
ISBN 13 : 3736933959
Total Pages : 188 pages
Book Rating : 4.7/5 (369 download)

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Book Synopsis The Value of Trust by : Valentin Schellhaas

Download or read book The Value of Trust written by Valentin Schellhaas and published by Cuvillier Verlag. This book was released on 2010-07-13 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book aims at introducing a new perspective on stock market behavior by developing a theory of trust in investment decision making, discussing its relevance and applicability to account for anomalies of investor behavior, and empirically testing propositions derived from this theory. Current economic research on investor behavior is still mainly dominated by rational choice, though – thanks to behavioral finance – select psychological factors have been largely acknowledged. Yet factors that go beyond a psychologically extended idea of rationality are still highly underrepresented in research, especially the role of emotions. Drawing upon research in psychology, sociology, and philosophy, trust is proposed as a concept to encompass the entirety of cognitive and affective aspects influencing decision making beyond strict rational choice. Trust offers an intuitive and integrative concept which complements ‘hard’ economic criteria and allows for a more holistic understanding of investor behavior. This approach opens up a new perspective on the role of trust in investment decisions on a firm-specific level (to account for cross-sectional differences) and on a global level (regarding, e.g., a global financial crisis). A definition of firm-specific trust in investment decisions is developed as the cognitive belief and emotional impression an investor has attained of the trustworthiness of a firm – complementing strict rational choice based on objective economic criteria. Additionally, a theoretical framework of investment decision making is proposed and hypotheses for future research are derived. A short review of finance theory shows that approaches which employ some form of bounded or psychologically amended rationality achieve better accounting for behavior ‘anomalies’ than classic finance theory approaches, but lack an integrative perspective and still underestimate the influence of emotions and moods for investment decisions. The new theory of trust as an alternative approach is found to yield a more holistic understanding of actual investor behavior than the fairly disparate behavioral finance approaches which only deal with selective anomalies – thus seconding its applicability for the economic context. The paper also delivers empirical support for hypotheses derived from the new theory – indicating that the aggregate trust perceptions of investors regarding a firm contribute to cross-sectional differences of stock performance. As firm-specific trust is defined as orthogonally complementing rational choice decision criteria based on objective economic company information, it is measured as the residual in a multilevel analysis which employs a rational choice market model and fundamental company data common to classic finance approaches. Using European market data of the past ten years, analyses in this paper find this firm-specific trust to incrementally contribute to subsequent firm performance and cross-sectional differences – in addition to rational choice based on market equity, price-book ratio and firm-specific volatility. The measure of trust is found to be fairly stable over time, and a higher level of trust robustly and significantly contributes to superior firm performance – though in some occasions superimposed upon by a contrary effect of other predictors. Additionally, some empirical support is found for the proposition that the salience of firm-specific trust as a differentiating factor increases in times of market crisis and decreases in times of market boom. The findings hint at the potential of employing trust for a broader perspective on investment decision making and amending strict rational choice models of classic finance theory. Furthermore, gaining its investors’ trust seems to be a competitive advantage for firms and may serve as a buffer against larger stock declines, especially in times of a crisis. All in all, the new theory of trust is backed by research insights from various disciplines, proves its applicability and relevance to account for known phenomena of investor behavior, and receives strong empirical support for propositions derived from it. Employing this concept of trust additionally allows reconciling classic finance theory with psychological drivers in investment decision making and opens up a new perspective for future research on investment decisions.