scholarly journals Risk Perceptions Of Individual Vs. Institutional Investors: A Comparison Based On The Johannesburg Stock Exchange

2011 ◽  
Vol 5 (4) ◽  
pp. 5 ◽  
Author(s):  
Colin Firer ◽  
Michael Colin Oliver ◽  
Gail Farrelly
Keyword(s):  
Institutional Investors ◽  
Risk Perceptions ◽  
Stock Exchange ◽  
Investment Analysis ◽  
Individual Investors ◽  
Total Risk ◽  
Johannesburg Stock Exchange ◽  
Measures Of Risk ◽  
The Individual

This paper examines risk at the individual, as opposed to the market, level. By means of questionnaires, individuals risk perceptions are collected and then correlated with other measures of risk. The survey was conducted for individual investors and investment analysis in order to determine if appreciable differences exist between the two sets of respondents. The results are consistent with previous research which suggests that investors consider total risk in their share assessments. The evidence also indicates no significant differences in the risk perceptions of investors vs. those of analysts.

Survey of Trading Systems for Individual Investors

2011 ◽  
pp. 157-176 ◽  
Author(s):  
M. Kersch ◽  
G. Schmidt
Keyword(s):  
Financial Markets ◽  
Stock Exchange ◽  
Point Of View ◽  
Individual Investors ◽  
Individual Investor ◽  
Trading System ◽  
Trading Systems ◽  
Trading Decisions ◽  
The Individual

Trading decisions in financial markets can be supported by the use of trading algorithms. To evaluate trading algorithms and to generate orders to be executed on the stock exchange trading systems are used. In this chapter, we define the individual investors’ requirements on a trading system, and analyze 17 trading systems from an individual investor’s point of view. The results of our study point out that the best alternative for an individual investor is not one single trading system, but a combination of two different classes of trading systems.

Stock Characteristics and Individual Herding

2020 ◽  
Vol 9 (4) ◽  
pp. 58-73
Author(s):  
Tze Sun Wong
Keyword(s):  
Stock Exchange ◽  
Target Population ◽  
Individual Investors ◽  
Market Capitalization ◽  
Independent Variables ◽  
Taiwan Stock Exchange ◽  
Excess Volatility ◽  
Log Odds ◽  
Industry Affiliation ◽  
The Individual

Individuals who invest stocks in a market with excess volatility generally end up selling or holding the stocks at losses. The purpose of this study was to examine individual herding as it related to three comprehensible stock characteristics, market capitalization, price-to-book ratio, and industry affiliation. The target population was the individual investors who traded in Taiwan Stock Exchange in 2016. Data were collected through subscription. Based on Lakonishok, Shleifer, and Vishny's measure, individual herding was significant. The three stock characteristics were separately and as a whole related to individual herding. The findings confirmed sell-herding higher than buy-herding, more serious herding in high market capitalization stocks, and broad industry herding. The findings also extended knowledge to comparable herding levels with 8 to 10 years ago, more linearity between log market capitalization and log odds of herd occurrence, and less herding in P/B ratio stocks with other independent variables controlled.

A study of prominence for disposition effect: a systematic review

2019 ◽  
Vol 11 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Syed Aliya Zahera ◽  
Rohit Bansal
Keyword(s):  
Mutual Funds ◽  
Behavioral Finance ◽  
Mutual Fund ◽  
Institutional Investors ◽  
Disposition Effect ◽  
Individual Investors ◽  
Content Type ◽  
Experimental Market ◽  
The Individual ◽  
The Impact

Purpose The purpose of this paper is to study the disposition effect that is exhibited by the investors through the review of research articles in the area of behavioral finance. When the investors are hesitant to realize the losses and quick to realize the gains, this phenomenon is known as the disposition effect. This paper explains various theories, which have been evolved over the years that has explained the phenomenon of disposition effect. It includes the behavior of individual investors, institutional investors and mutual fund managers. Design/methodology/approach The authors have used the existing literatures from the various authors, who have studied the disposition effect in either real market or the experimental market. This paper includes literature over a period of 40 years, that is, Dyl, 1977, in the form of tax loss selling, to the most recent paper, Surya et al. (2017). Some authors have used the PGR-PLR ratio for calculating the disposition effect in their study. However, some authors have used t-test, ANNOVA, Correlation coefficient, Standard deviation, Regression, etc., as a tool to find the presence of disposition effect. Findings The effect of disposition can be changed for different types of individual investors, institutional investors and mutual funds. The individual investors are largely prone to the disposition effect and the demographic variables like age, gender, experience, investor sophistication also impact the occurrence of the disposition effect. On the other side, the institutional investors and mutual funds managers may or may not be affected by the disposition effect. Practical implications The skilled understanding of the disposition effect will help the investors, financial institutions and policy-makers to reduce the adverse effect of this bias in the stock market. This paper contributes a detailed explanation of disposition effect and its impacts on the investors. The study of disposition effect has been found to be insufficient in the context of Indian capital market. Social implications The investors and society at large can gains insights about causes and influences of disposition effect which will be helpful to create sound investment decisions. Originality/value This paper has complied the 11 causes for the occurrence of disposition effect that are found by the different authors. The paper also highlights the impact of the disposition effect in the decision-making of various investors.

A CLOSER LOOK AT THE CHARACTERISTICS OF STOCK HOLDINGS OF FOREIGN AND LOCAL INVESTORS IN THE INDONESIAN STOCK EXCHANGE (IDX)

2013 ◽  
Vol 08 (01) ◽  
pp. 1350002 ◽  
Author(s):  
JOSEPHINE SUDIMAN ◽  
DAVID ALLEN ◽  
ROBERT POWELL
Keyword(s):  
Institutional Investors ◽  
Stock Exchange ◽  
Individual Investors ◽  
Foreign Investors ◽  
Market Capitalization ◽  
Price Levels

This study provides an overview of the characteristics of stockholdings of foreign and local investors in terms of firm sizes, price levels and liquidity. There are four key findings. First, the IDX is a highly concentrated market and foreign investors dominate the ownership of high market capitalization stocks. Second, foreign investors trade less frequently than domestic counterparts. Third, small, illiquid lower priced stocks dominate this market with domestic individual investors holding most of the stocks with these characteristics. Finally, the paper profits of foreign institutional and domestic individual investors are found to be higher than those of domestic institutional investors.

scholarly journals Institutional Investors, Earnings Management And Mispricing Of Accruals: Evidence From China

2012 ◽  
Vol 29 (1) ◽  
pp. 275
Author(s):  
Zhen Zeng ◽  
Peiyu Ou ◽  
Bin Li
Keyword(s):  
Earnings Management ◽  
Institutional Investors ◽  
Discretionary Accruals ◽  
Individual Investors ◽  
The Individual ◽  
A Share

This study examines the role of institutional investors in the pricing of normal accruals and discretionary accruals using the firms listed in the Chinese A-share Market. The results show that significant overpricing of discretionary accruals exists for individual investors and institutional investors, suggesting that they are both misled by the earnings management, while institutional investors are associated with significantly less overpricing. With respect to normal accruals, we find there is no evidence that institutional investors misprice normal accruals, while the individual investors overprice normal accruals. Our results suggest that institutional investors superiority in mitigating the mispricing of total accruals is mainly due to their accurate pricing of normal accruals, and the reason why institutional investors cannot fully eliminate mispricing of accruals is that they are partly misled by earnings management.

The KOSPI200 Index Option Trading Behavior and Performance of Individual Investors

2005 ◽  
Vol 13 (1) ◽  
pp. 99-127
Author(s):  
Jay M. Chung ◽  
Jae Keun Kim
Keyword(s):  
Stock Exchange ◽  
Individual Investors ◽  
Sample Period ◽  
Trading Behavior ◽  
Option Trading ◽  
Period Data ◽  
And Performance ◽  
The Individual ◽  
Short Time ◽  
Index Option

We examine the argument of the Financial Supervisory Service that the behavior of the Individual Investors to buy an out-of-the-money option is excessively speculative. The FSS reported that the individual investors incurred huge losses in the trading of KOSPI200 index options for the years 2002 and 2003. But since the sample period is relatively short, the argument does not seem fully convincing. Using a longer period data from July 1997 to December 2003, we reconfirm the huge losses of the Individual investors and also find that a tendency of individual investors losing money in association with option trading perSisted during the longer period. The individual investors chose out-of-the money options with short time to maturity, that are cheap and thus are expected to make huge profits with very low probabilities. Finally, we tind that out-ot-the money options with short time to maturity turn out to be in general priced higher than what the Korea Stock Exchange model suggests. The practice of purchasing out-of-the-money options for the reason of cheap prices and huge profit possibilities can be regarded as being excessively speculative. Due to overpricing, the individual investors persistently incurred some losses.

Do behavioral biases differ among institutional and individual investors?

2021 ◽  
pp. 61-73
Author(s):  
Roshani Chamalka Gunathilaka ◽  
◽  
J. M. Ruwani Fernando ◽  
Keyword(s):  
Decision Making ◽  
Institutional Investors ◽  
Emerging Market ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Disposition Effect ◽  
Individual Investors ◽  
Behavioral Biases ◽  
The Individual ◽  
Overconfidence Bias

Purpose: The purpose of this paper is to investigate how does the behavioral biases differ among the individual and institutional investors based on Colombo Stock Exchange. The study considers the effect of four behavioral biases; overconfidence bias, representativeness bias, disposition effect and herd mentality bias on the financial investment decision making of individual investors and institutional investors. Design / methodology / approach: A questionnaire was utilized to collect the data and the final sample consisted with 104 individual and 71 institutional respondents. The data of 175 investors was analyzed by using Partial Least Square-Structural Equation Modeling approach. Findings: The study revealed that disposition effect make an impact on the investment decisions of both individual investors and institutional investors whereas overconfidence bias has impact only on the individual investors’ investment decisions. Originality: This study is one of the pioneering studies examining the behavioral biases differences of individual and institutional investors’ decision making. Thus, this study expands the existing literature in the field of behavioral finance particularly in emerging market context. In this sense, the findings of this study could draw important inferences for researchers, investors and policy makers to ensure that they make rational investments decisions.

Volatility–Volume Relationships Among Types of Traders Considering the Investment Limitation to Foreign Investors

2006 ◽  
Vol 09 (04) ◽  
pp. 575-596 ◽  
Author(s):  
Ching-Mann Huang ◽  
Tsai-Yin Lin ◽  
Chih-Hsien Yu ◽  
Si-Ying Hoe
Keyword(s):  
Stock Market ◽  
Institutional Investors ◽  
Trading Volume ◽  
Individual Investors ◽  
Volume Data ◽  
Foreign Investors ◽  
Volume Relationship ◽  
Before And After ◽  
The Individual

This paper examines the volatility–volume relationship in Taiwan stock market, using volume data categorized by type of trader. We consider before and after our event period of lifting the investment restrictions for foreign investors. We partition trading volume into expected and unexpected volume and find that the unexpected volume shocks for individual investors are more important than the expected volume shocks in explaining volatility before lifting the investment restrictions for the foreign investors. We find that the positive volatility–volume relationship is driven by the individual investors even during the period of the lifting of investment restrictions for foreign investors. However, with respect to institutional investors, before the removal of investment restrictions for foreign investors, the unexpected volume of trading of the domestic dealers exhibit positive volatility–volume relationship. Further, after the removal of investment restrictions, the unexpected volume of the foreign investors has a positive volatility–volume relationship.

scholarly journals Factors influencing Individual Investor Behaviour: Evidence from the Kuwait Stock Exchange

2019 ◽  
Vol 15 (3) ◽  
pp. 27 ◽  
Author(s):  
Sadeq J. Abul
Keyword(s):  
Psychological Factors ◽  
Stock Exchange ◽  
Individual Investors ◽  
Individual Investor ◽  
Factors Influencing ◽  
Risk Appetite ◽  
Kuwait Stock Exchange ◽  
Herd Behaviour ◽  
Investor Behaviour ◽  
The Individual

This study investigates the effects of psychological factors on investor behaviour regarding the Kuwait Stock Exchange (KSE). These psychological factors are, namely: excessive optimism vs pessimism, herd behaviour and risk appetite. The data for this study obtained from KSE and a survey of a random sample of 398 individual investors. By using qualitative analysis and based on the theory of behavioural finance, the study findings show that herd behaviour, optimism and psychology risk have an impact on the individual investors’ decisions. However, we did not find any evidence of overconfidence behaviour’s effects on investors’ decisions. To our knowledge, KSE has been examined by several researchers without taking into consideration the effects of psychological factors on individual investor decisions. This study finds that psychological factors play a significant role in individual investors’ decisions regarding KSE. This study might contribute positively to the development of this field of research in (KSE).

scholarly journals Economy, psychology and stock investment: analysis of variables that participate in the process of decision making

2012 ◽  
Vol 5 (1) ◽  
pp. 5-17
Author(s):  
David Pascual Ezama ◽  
Beatriz Gil-Gómez De Liaño ◽  
Barbara Scandroglio
Keyword(s):  
Decision Making ◽  
Psychometric Properties ◽  
Stock Exchange ◽  
Investment Analysis ◽  
Investor Behavior ◽  
Individual Investors ◽  
Individual Investor ◽  
Stock Investment ◽  
Lack Of Information ◽  
The Relationship

The ININBE questionnaire has been recently validated in order to measure the variables that affect individual investor behavior in stock exchange. The lack of information about the methodology, items selection and psychometric properties of the instruments used in other researches has shown the necessary to elaborate and validate a questionnaire. In the present work we have applied the ININBE questionnaire to 257 individual investors. We have found interesting results about the relationship between the “psychological” and “economical” variables with individual investor’s characteristics.

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