Predicting Stock Market Performance

2020 ◽  
pp. 1-10
Author(s):  
Thomas Plieger ◽  
Thomas Grünhage ◽  
Éilish Duke ◽  
Martin Reuter
Keyword(s):  
Stock Market ◽  
Risk Taking ◽  
Life Stress ◽  
Price Volatility ◽  
Individual Characteristics ◽  
Self Report ◽  
Financial Behavior ◽  
Market Simulation ◽  
Stock Market Performance ◽  
Risk Taking Behavior

Abstract. Gender and personality traits influence risk proneness in the context of financial decisions. However, most studies on this topic have relied on either self-report data or on artificial measures of financial risk-taking behavior. Our study aimed to identify relevant trading behaviors and personal characteristics related to trading success. N = 108 Caucasians took part in a three-week stock market simulation paradigm, in which they traded shares of eight fictional companies that differed in issue price, volatility, and outcome. Participants also completed questionnaires measuring personality, risk-taking behavior, and life stress. Our model showed that being male and scoring high on self-directedness led to more risky financial behavior, which in turn positively predicted success in the stock market simulation. The total model explained 39% of the variance in trading success, indicating a role for other factors in influencing trading behavior. Future studies should try to enrich our model to get a more accurate impression of the associations between individual characteristics and financially successful behavior in context of stock trading.

scholarly journals Market shocks and professionals' investment behavior – Evidence from the COVID-19 crash

2020 ◽  
Author(s):  
Christoph Huber ◽  
Juergen Huber ◽  
Michael Kirchler
Keyword(s):  
Stock Market ◽  
Risk Aversion ◽  
Risk Taking ◽  
Investment Behavior ◽  
Controlled Experiments ◽  
Price Expectations ◽  
Market Crashes ◽  
Changes In Risk ◽  
Risk Taking Behavior ◽  
Market Shocks

We investigate how the experience of stock market shocks, such as the COVID-19 crash, influences risk-taking behavior. To isolate changes in risk taking from other factors during stock market crashes, we ran controlled experiments with finance professionals in December 2019 and March 2020. We observe that their investments in the experiment were 12 percent lower in March 2020 than in December 2019, although their price expectations had not changed, and although they considered the experimental asset less risky during the crash than before. Thus, lower investments are driven by higher risk aversion, not by changes in beliefs.

scholarly journals Are the Effects of Age Still Relevant in Predicting Malaysian Investors’ Risk-Taking Behavior in Stock Market?

2018 ◽  
Vol 7 (3.21) ◽  
pp. 238
Author(s):  
Audrey Lim Li Chin ◽  
Arfan Shahzad
Keyword(s):  
Stock Market ◽  
Risk Taking ◽  
Structural Equation ◽  
Age Groups ◽  
Kuala Lumpur ◽  
Self Confidence ◽  
Significant Difference ◽  
Familiarity Bias ◽  
Risk Taking Behavior ◽  
Using Data

The role of age in moderating investor’s self-confidence bias, herding, conservatism bias, familiarity bias, and regret in risk-taking behavior is explored using data collected from retail investors in Melaka, Selangor, and Wilayah Persekutuan (W.P.) Kuala Lumpur. As indicated in data analysis by Partial Least Squares Structural Equation Modelling (PLS-SEM), age plays an important moderating role in herding, regret, and self-confidence bias in investor’s risk-taking behavior. While younger investors who tend to herd are more risk averse and feel more regret in risk-taking than the older group, older investors seem to exhibit a higher level of self-confidence bias than younger investors. However, the risk- taking distribution between the age groups indicates no significant difference. Thus, the readiness in greater levels of risk acceptance depends on the individuals’ preference towards herding, regret, and self-confidence bias. Furthermore, this study also address contradictions in the existing literatures that fuels stereotyping and discrimination based on age. Therefore, age stereotype should be avoided when formulating microstructure strategies to raise the investor’s participation in the stock market.  

scholarly journals FOOTBALL AND STOCK MARKET PERFORMANCE CORRELATION: EVIDENCE FROM ITALY

2019 ◽  
Vol 66 (4) ◽  
pp. 525-539
Author(s):  
Claudiu Botoc ◽  
Eugen Mihancea ◽  
Alin Molcut
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Stock Price ◽  
Positive Impact ◽  
Price Volatility ◽  
Sport Performance ◽  
Policy Implications ◽  
Football Clubs ◽  
Stock Market Performance ◽  
New Challenges

The increasing growth of soccer economy is delivering new challenges for prospective investors in terms of stock price volatility. Such challenges are rooted in behavioral finance and efficient market hypotheses. Given this, the aim of our paper is to test the link between sport performance and correspondent stock price for the Italian listed football clubs (Juventus, Lazio, AS Roma). Our results suggest that soccer wins are likely to have a positive impact over stock price. This impact is more pronounced for local stocks and thus the findings have policy implications for emotional investors.

scholarly journals COVID-19 and instability of stock market performance: evidence from the U.S.

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Hui Hong ◽  
Zhicun Bian ◽  
Chien-Chiang Lee
Keyword(s):  
Stock Market ◽  
Linear Time ◽  
Market Performance ◽  
Price Volatility ◽  
Wealth Inequality ◽  
Return Predictability ◽  
Theory And Practice ◽  
Link Type ◽  
Stock Market Performance ◽  
The U.S

AbstractThe effect of COVID-19 on stock market performance has important implications for both financial theory and practice. This paper examines the relationship between COVID-19 and the instability of both stock return predictability and price volatility in the U.S over the period January 1st, 2019 to June 30th, 2020 by using the methodologies of Bai and Perron (Econometrica 66:47–78, 1998. 10.2307/2998540; J Appl Econo 18:1–22, 2003. 10.1002/jae.659), Elliot and Muller (Optimal testing general breaking processes in linear time series models. University of California at San Diego Economic Working Paper, 2004), and Xu (J Econ 173:126–142, 2013. 10.1016/j.jeconom.2012.11.001). The results highlight a single break in return predictability and price volatility of both S&P 500 and DJIA. The timing of the break is consistent with the COVID-19 outbreak, or more specifically the stock selling-offs by the U.S. senate committee members before COVID-19 crashed the market. Furthermore, return predictability and price volatility significantly increased following the derived break. The findings suggest that the pandemic crisis was associated with market inefficiency, creating profitable opportunities for traders and speculators. Furthermore, it also induced income and wealth inequality between market participants with plenty of liquidity at hand and those short of funds.

scholarly journals Effects of acetaminophen on risk taking

2020 ◽  
Vol 15 (7) ◽  
pp. 725-732
Author(s):  
Alexis Keaveney ◽  
Ellen Peters ◽  
Baldwin Way
Keyword(s):  
Risk Perception ◽  
Risk Taking ◽  
Perceived Risk ◽  
Risk Perceptions ◽  
Self Report ◽  
Double Blind ◽  
Total N ◽  
Increased Risk ◽  
The Usa ◽  
Risk Taking Behavior

Abstract Acetaminophen, an analgesic and antipyretic available over-the-counter and used in over 600 medicines, is one of the most consumed drugs in the USA. Recent research has suggested that acetaminophen’s effects extend to the blunting of negative as well as positive affect. Because affect is a determinant of risk perception and risk taking, we tested the hypothesis that acute acetaminophen consumption (1000 mg) could influence these important judgments and decisions. In three double-blind, placebo-controlled studies, healthy young adults completed a laboratory measure of risk taking (Balloon Analog Risk Task) and in Studies 1 and 2 completed self-report measures of risk perception. Across all studies (total n = 545), acetaminophen increased risk-taking behavior. On the more affectively stimulating risk perception measure used in Study 2, acetaminophen reduced self-reported perceived risk and this reduction statistically mediated increased risk-taking behavior. These results indicate that acetaminophen can increase risk taking, which may be due to reductions in risk perceptions, particularly those that are highly affect laden.

scholarly journals Latent Structure of Risk Perception

2018 ◽  
Author(s):  
Elisa Pabon ◽  
James MacKillop ◽  
Abraham A. Palmer ◽  
Harriet de Wit
Keyword(s):  
Risk Taking ◽  
Risky Sexual Behavior ◽  
Self Report ◽  
Latent Structure ◽  
Risk Sensitivity ◽  
Perception Of Risk ◽  
Men And Women ◽  
Behavioral Tasks ◽  
Measures Of Risk ◽  
Risk Taking Behavior

AbstractRisk-taking behavior affects many aspects of life, including maladaptive behaviors such as illicit substance use, unsafe driving, and risky sexual behavior. Risk-taking has been measured using both self-report measures and behavioral tasks designed for the purpose, but there is little consensus in the associations among measures and our understanding of the latent constructs underlying different forms of risk is limited. In the present study we examined the construct of risk using data from over 1000 young adults who completed measures of risk-taking, including self-reports of perception of risk, propensity to engage in risky behaviors and performance on behavioral tasks designed to measure risk. To examine the latent structure of risk preferences, we conducted a principal component analysis (PCA). The PCA revealed a latent structure of three distinct components of risk-taking behavior: “Lifestyle Risk Sensitivity”, “Financial Risk Sensitivity”, and “Behavioral Risk Sensitivity”, which consisted only of the Balloon Analogue Risk Task (BART; Lejuez et al., 2002). As expected, risk-taking and perception of risk differed in men and women. Yet, the PCA components were similar in men and women. Future work utilizing additional measures of risk-taking behavior in more heterogeneous samples will help to identify the true biobehavioral constructs underlying these behaviors.

Risk-Taking Behavior Associated With Affective States

2014 ◽  
Author(s):  
Ari B. Deutsch ◽  
Michael Koren ◽  
Rachel Moody
Keyword(s):  
Risk Taking ◽  
Affective States ◽  
Risk Taking Behavior
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