Expectation Formation and Trading Behavior: How Investment Position Interacts with Information Favorability in Investment Decisions

2021 ◽  
Author(s):  
Kevin Trutmann ◽  
Steve Heinke ◽  
Jörg Rieskamp
Keyword(s):  
Investment Decisions ◽  
Trading Behavior ◽  
Expectation Formation

scholarly journals Exposure to the COVID-19 Stock Market Crash and Its Effect on Household Expectations

2020 ◽  
pp. 1-45
Author(s):  
Tobin Hanspal ◽  
Annika Weber ◽  
Johannes Wohlfart
Keyword(s):  
Labor Market ◽  
Stock Market ◽  
Investment Decisions ◽  
Working Hours ◽  
Retirement Age ◽  
Stock Market Crash ◽  
Expectation Formation ◽  
Market Crashes ◽  
Labor Market Activity ◽  
Shed Light

We survey a representative sample of US households to study how exposure to the COVID-19 stock market crash affects expectations and planned behavior. Wealth shocks are associated with upward adjustments of expectations about retirement age, desired working hours, and household debt, but have only small effects on expected spending. We provide correlational and experimental evidence that beliefs about the duration of the stock market recovery shape households’ expectations about their own wealth and their planned investment decisions and labor market activity. Our findings shed light on the implications of household exposure to stock market crashes for expectation formation.

Home Price Expectations and Behaviour: Evidence from a Randomized Information Experiment

2018 ◽  
Vol 86 (4) ◽  
pp. 1371-1410 ◽  
Author(s):  
Luis Armona ◽  
Andreas Fuster ◽  
Basit Zafar
Keyword(s):  
Portfolio Choice ◽  
Choice Experiment ◽  
Online Survey ◽  
Investment Decisions ◽  
Causal Effects ◽  
Factual Information ◽  
Short Term ◽  
Price Expectations ◽  
Expectation Formation ◽  
Price Growth

Abstract Home price expectations are believed to play an important role in housing dynamics, yet we have limited understanding of how they are formed and how they affect behaviour. Using a unique “information experiment” embedded in an online survey, this article investigates how consumers’ home price expectations respond to past home price growth, and how they impact investment decisions. After eliciting respondents’ priors about past and future local home price changes, we present a random subset of them with factual information about past (one- or five-year) changes, and then re-elicit expectations. This unique “panel” data allows us to identify causal effects of the information, and provides insights on the expectation formation process. We find that, on average, year-ahead home price expectations are revised in a way consistent with short-term momentum in home price growth, though respondents tend to underpredict the strength of momentum. Revisions of longer-term expectations show that respondents do not expect the empirically-occurring mean reversion in home price growth. These patterns are in line with recent behavioural models of housing cycles. Finally, we show that home price expectations causally affect investment decisions in a portfolio choice experiment embedded in the survey.

scholarly journals Differential Investment Performance In South Africa Based On Gender

2014 ◽  
Vol 14 (1) ◽  
pp. 221 ◽  
Author(s):  
Gizelle Willows ◽  
Darron West
Keyword(s):  
South African ◽  
Investment Decisions ◽  
Significant Negative Correlation ◽  
Individual Investors ◽  
Trading Behavior ◽  
Investment Performance ◽  
Men And Women ◽  
Trading Frequency ◽  
Significant Difference ◽  
Attribution Biases

Research has shown that, as a result of certain behavioural biases, individuals do not always make investment decisions in such a way as to maximise their expected utility. These biases have also been observed to manifest differently within gender: men are more overconfident, they display higher risk tolerances and they exhibit stronger self-efficacy and self-attribution biases. The trading behavior and resultant returns of 19,021 individual investors from a South African investment house were analysed over a five-year period (1 January 2007 31 December 2011). The results showed a statistically significant negative correlation between trading frequency and investor return. While there is no statistically significant difference in the returns earned by men and women; men trade more and have higher variances of returns than women. The data suggests that, on a risk-adjusted basis, women are better investors than men.

Role of Financial and Non-Financial Information in Shaping Trading Behavior: A Retail Investor’s Perspective

2020 ◽  
Vol 38 (3) ◽  
Author(s):  
Muhammad Naveed ◽  
Muzammal Ilyas Sindhu ◽  
Shoaib Ali
Keyword(s):  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Financial Information ◽  
Equation Modeling ◽  
Trading Behavior ◽  
Stock Trading ◽  
Retail Investors ◽  
Retail Investor

This study aims to examine the role of information disclosure in determining retail investor trading behavior. The approach of the study is deductive, while the quantitative strategy is adopted by using a survey questionnaire for data collection. Primary data was collected from 386 retail investors actively involved in stock trading at Pakistan Stock Exchange (PSX). Theoretical underpinning is based on the signaling theory. Covariance based structural equation modeling (SEM) has carried out to statistically examine the strength of the proposed model.The key findings of this study exhibit that on average, retail investors invest in firms with detailed financial and non-financial disclosures. The result also shows the intervening influence of perceived corporate image on retail investor decisions. Categorically, the finding of this study indicates that improved financial and non-financial disclosure practices support retail Investors to make sound stock investment decisions. The proposed model is novel to insight into the retail investor investment decision in the context of Pakistan.The results should be of interest to firms reporting detail and cohesive non-financial information with the presumption that it is requisite to influence the investor's investment decision making. The result reflects the mismatch between retail Investors' preferences and firm's information reporting practices, which in turn affect their appeal toward investment decisions. This study contributes to the comprehension of the information needs of retail investors and how it hailed their trading behavior.  The findings of the study remain robust to firms listed on a stock exchange and retail Investor involved in stock trading.

Self-predictions of investment decisions under narrow and broad bracketing

2007 ◽  
Author(s):  
Rebecca J. White ◽  
Derek J. Koehler ◽  
Annie Li
Keyword(s):  
Investment Decisions

Pengaruh Keputusan Investasi, Kebijakan Hutang Dan Kebijakan Dividen Terhadap Nilai Perusahaan

2019 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Ivan Somantri ◽  
Hadi Ahmad Sukardi
Keyword(s):  
Firm Value ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Sampling Technique ◽  
Mining Sector ◽  
Dividend Policies ◽  
Negative Effect ◽  
Debt Policy ◽  
Debt Policies

This study aims to determine how to influence simultaneously and partially investment decisions, debt policy and dividend policy on firm value in mining sector companies listed on the Indonesia Stock Exchange for the period 2013-2017. The research method used in this study is descriptive and associative methods. The population in this study were mining sector companies listed on the Indonesia Stock Exchange in the period 2013-2017, which amounted to 43 companies. The sampling technique used in this study is non probability sampling with purposive sampling method, so that the number of samples obtained is 8 companies. While the data analysis used in this study is panel data regression analysis with the fixed effect method. The results of the study show that partially investment decisions and debt policies have a positive effect on firm value. While dividend policy has a negative effect on firm value. In addition, the results of the study simultaneously show that investment decisions, debt policies and dividend policies affect the value of the company. The amount of investment decisions, debt policy and dividend policy in contributing influence to earnings management is 34.14%.

Peran kepemilikan institusional, perencanaan pajak dan dewan komisaris asing terhadap nilai perusahaan

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Anita Ade Rahma ◽  
Lisa Nabawi ◽  
Ronni Andri Wijaya
Keyword(s):  
Significant Influence ◽  
Firm Value ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Total Sample ◽  
Tax Planning ◽  
Purposive Sampling ◽  
Institutional Leadership ◽  
Company Value

The purpose of this study is to analyze the role of institutional leadership, tax planning and foreign board of commissioners on firm value. The population in this study were 615 companies listed on the Indonesia Stock Exchange in 2015-2017. The sample was chosen using purposive sampling to get a total sample of 325 companies with a total of 975 observations of company data. The results of this study indicate that institutional leadership and tax planning have no role in increasing company value. While the foreign board of commissioners showed a significant influence on the value of the company. This proves that there is a need for diversity in the structure of the board that can trigger an increase in the value of the company. In addition, the presence of a foreign board is needed for the progress of the companyKeywords: Investment decisions; funding decisions; dividend policy; company value

Pengaruh keputusan investasi, keputusan pendanaan, dan kebijakan dividen terhadap nilai perusahaan yang terdaftar di Bursa Efek Indonesia

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Dina Patrisia ◽  
Muthia Roza Linda ◽  
Ursa Yulianti
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Secondary Data ◽  
Sampling Technique ◽  
Total Sample ◽  
Manufacturing Companies ◽  
Positive Direction ◽  
Company Value

This study aims to analyze the effect of investment decisions, funding decisions, and dividend policy on the value of the company. This research is classified as causative research. The populations in this study are all Manufacturing companies listed on the Stock Exchange in 2012-2016. The sampling technique in this study is using purposive sampling technique with a total sample of 213 samples. The data used is secondary data. The data analysis method used is multiple regression. The results showed that investment decision variables affect the value of the company in a positive direction, funding decisions affect the value of the company in a negative direction, and dividend policy affects the value of the company with a positive direction on Manufacturing companies listed on the IDX. With this research, it is expected that researchers who can further conduct research related to factors that influence the value of the company whose impact is higher than what researchers have met. By using different proxy and data processing methods to produce more accurate data processingKeywords: Investment decisions; funding decisions; dividend policy; company value

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