Local Does as Local Is: Information Content of the Geography of Individual Investors' Common Stock Investments

PurposeThis study examines how the importance of external investment environment factors affect stock market perception, and how stock market perception affects stock investments after stock market crash witnessed by individual investors in one of the emerging stock markets.Design/methodology/approachA cross-sectional survey was administrated among 223 individual investors who experienced stock market crash in 2010–2011 in Bangladesh, and the proposed model was tested by the partial least squares-structural equation modeling PLS-SEM model.FindingsFindings show that the importance of Bangladesh's stock market performance, government policy, economic issues and neighboring country's stock market performance has effects on investors' stock market perception. This perception, in turn, decreases monthly stock trading and short-term investment horizon. The findings further show the mediating effect of stock market perception.Practical implicationsInvestors need to carefully consider the external investment environment when they form their stock market perception, as this perception drives stock investments. Analogously, regulators should ensure releasing timely and updated statistics on external investment factors.Originality/valueAddressing those investors who encountered stock market crash, a set of external investment environment issues, stock market perception and stock investments are new in the literature.

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The Information Content of Investors' Expectations for Risk and Return

Quarterly Journal of Finance ◽

10.1142/s2010139213500171 ◽

2013 ◽

Vol 03 (03n04) ◽

pp. 1350017

Author(s):

Thomas Berry ◽

Keith Jacks Gamble

Keyword(s):

Information Content ◽

Personal Experience ◽

Individual Investors ◽

Cross Sectional ◽

Risk And Return ◽

Stock Performance ◽

Limited Experience ◽

Future Risk ◽

The Cross

This study reveals the information content of individual investors' risk-adjusted return expectations. Although individual investors overestimate the performance of their stock purchases on an average, the cross-sectional variation in their risk-adjusted return expectations is predictive of future risk-adjusted stock performance. Stock purchases that investors expect to outperform the most do outperform the stock purchases that investors expect to outperform the least by an annualized alpha of 16%. The best performing stocks are those that investors with excellent experience expect to outperform the most while the worst performing stocks are those that investors with limited experience expect to outperform the least. The most experienced investors appear to be successfully using information gathered from personal experience with the company's products or services, contact with someone who works for or with the company on a regular basis, and proximity to the company's operations.

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The Information Content of Common Stock Repurchases: An Empirical Study1

British Journal of Management ◽

10.1111/j.1467-8551.1994.tb00131.x ◽

1994 ◽

Vol 5 (s1) ◽

pp. S65-S75 ◽

Cited By ~ 1

Author(s):

Daniel Oyon ◽

Constantinos C. Markides ◽

Christopher D. Ittner

Keyword(s):

Information Content ◽

Stock Repurchases ◽

Common Stock

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More than just Noise? Examining the Information Content of Stock Microblogs on Financial Markets

Journal of Information Technology ◽

10.1057/s41265-016-0034-2 ◽

2018 ◽

Vol 33 (1) ◽

pp. 50-69 ◽

Cited By ~ 12

Author(s):

Ting Li ◽

Jan van Dalen ◽

Pieter Jan van Rees

Keyword(s):

Financial Markets ◽

Stock Returns ◽

Information Content ◽

Computational Linguistics ◽

Trading Volume ◽

Abnormal Returns ◽

Feature Reduction ◽

Individual Investors ◽

Market Sentiment ◽

Aggregation Of Information

Scholars and practitioners alike increasingly recognize the importance of stock microblogs as they capture the market discussion and have predictive value for financial markets. This paper examines the extent to which stock microblog messages are related to financial market indicators and the mechanism leading to efficient aggregation of information. In particular, this paper investigates the information content of stock microblogs with respect to individual stocks and explores the effects of social influences on an interday and intraday basis. We collected more than 1.2 million stock-related messages (i.e., tweets) related to S&P 100 companies over a period of 7 months. Using methods from computational linguistics, we went through an elaborate process of message feature reduction, spam detection, language detection, and slang removal, which has led to an increase in classification accuracy for sentiment analysis. We analyzed the data on both a daily and a 15-min basis and found that the sentiment of messages is positively affected with contemporaneous daily abnormal stock returns and that message volume predicts 15-min follow-up returns, trading volume, and volatility. Disagreement in microblog messages positively influences stock features, both in interday and intraday analysis. Notably, if we give a greater share of voice to microblog messages depending on the social influence of microbloggers, this amplifies the relationship between bullishness and abnormal returns, market volume, and volatility. Following knowledgeable investors advice results in more power in explaining changes in market features. This offers an explanation for the efficient aggregation of information on microblogging platforms. Furthermore, we simulated a set of trading strategies using microblog features and the results suggest that it is possible to exploit market inefficiencies even when transaction costs are included. To our knowledge, this is the first study to comprehensively examine the association between the information content of stock microblogs and intraday stock market features. The insights from the study permit scholars and professionals to reliably identify stock microblog features, which may serve as valuable proxies for market sentiment and permit individual investors to make better investment decisions.

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Peer Effects at Work: The Common Stock Investments of Co-Workers

SSRN Electronic Journal ◽

10.2139/ssrn.2179095 ◽

2012 ◽

Cited By ~ 1

Author(s):

Hans K. Hvide ◽

Per Östberg

Keyword(s):

Peer Effects ◽

Common Stock ◽

The Common ◽

Stock Investments

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ASSESSMENT OF INDIVIDUAL AND INSTITUTIONAL INVESTOR’S INVESTMENT BEHAVIOR DURING COVID-19: A CASE OF EMERGING ECONOMY

DECEMBER - Journal of Social Research Development ◽

10.53664/jsrd/01-01-2020-09-93-104 ◽

2020 ◽

Vol 01 (01) ◽

pp. 93-104

Author(s):

Aamir Sohail ◽

Abid Hussain ◽

Farhad Hussain

Keyword(s):

Stock Exchange ◽

Data Interpretation ◽

Individual Investors ◽

Investment Behavior ◽

Structured Interviews ◽

Fund Managers ◽

Stock Investment ◽

Retail Investors ◽

Stock Investments ◽

Ability Bias

In study of stock investment in the capital market by investors in Pandemic Covid-19, it is always carried out rationally. Decisions on stock investments are not always rational. main purpose of research is to analyze behavioral factors that affect preferences of individual’s investors and fund managers in emerging stock market, Pakistan Stock Exchange. The data of this research were “collected through semi-structured interviews with five fund managers and five individual investors” from Pakistan Stock Exchange. The researchers used thematic analysis for data interpretation. The major findings stress that retail investors are more effected by behavioral biases in comparison with fund managers. The results shows that there are some major biases which are affecting both type of investors like overconfidence-gambling, herding, market, prospect, errors and anchoring-ability bias. Data for this study was collected for one time only, for better understanding data may be collected for more than one time in future. Triangulation method may be directed in future for further clarification in existing study.

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