scholarly journals How do collectives of amateurs handle complexity on financial markets while deciding?

2018 ◽  
Vol 15 (2) ◽  
pp. 52-68
Author(s):  
Lydia Judith Welbers
Keyword(s):  
Financial Markets ◽  
Group Composition ◽  
Investment Decisions ◽  
Organisational Structure ◽  
Definition Of The Situation ◽  
True Value ◽  
Retail Investors ◽  
Interaction Order ◽  
Ethnographic Data ◽  
Definition Of

This paper questions how investment clubs – as small groups of retail investors that pool their money – cope with issues of hyper-complexity and truth while deciding together where to invest their money. This may be challenging because investment-decisions are characterised by informational complexity, an unknown future and double contingency. By employing ethnographic data, this paper traces how investment clubs reach a collective decision despite hyper-complexity. It will be shown how the members of the group struggle to make sense of and to find a shared definition of a situation. During this process they try to reduce complexity by evaluating and deciding collectively. The ways the different groups achieve this is influenced by the group composition, their organisational structure and the interaction order. In some groups negotiations are an essential part of their meetings whereby complexity is initially cultivated. Negotiations are used to develop a shared definition of the situation. These groups question if the truth can be uncovered in financial markets. Other groups reduce complexity by using certain techniques to uncover the true value of a stock. These ways of coping with complexity are bound to certain ways of organising and types of members. Accordingly, successful evaluating and deciding, which means that decisions are made, is bound to several exclusions that are made legitimate by the inclusion in the financial market. In summary, the paper adds new insights to processes of decision making in situations that are characterised by complexity.

scholarly journals WHAT DRIVES RETAIL INVESTORS’ INVESTMENT DECISIONS? EVIDENCE FROM NO MOBILE PHONE PHOBIA (NOMOPHOBIA) AND INVESTOR FEAR OF MISSING OUT (I – FOMO)

2020 ◽  
Vol 11 (10) ◽  
pp. 2-20 ◽  
Keyword(s):  
Financial Markets ◽  
Mobile Phone ◽  
Media Studies ◽  
Investment Decisions ◽  
Partial Least Square ◽  
Behavioural Finance ◽  
Fear Of Missing Out ◽  
Retail Investors ◽  
Investor Behaviour ◽  
The Relationship

The main objective of the study is to investigate the impact of No-Mobile-Phobia (Nomophobia) on retail investors‟ investment decisions. The relationship was further analysed by incorporating the role of Investor related Fear-of-Missing-Out (I-FoMO) which is different from traditional FOMO in Indian Financial Markets. The information asymmetry is generated by the absence of a mobile phone coupled with the fear of missing important information in financial markets used for extensive investment decisions was determined by conducting a survey method. A total of 265 retail investors were used for analysing the data and to explore this new phenomenon by Partial Least Square Structural Equational Modelling (PLS-SEM) in SmartPLS version 3.3.2. Further, Importance Performance Map Analysis (IMPA) was applied to investigate the critical factors for determining investor behaviour. The results revealed that there is a tendency to exhibit overtrading by retail investors in the state of fear of no investment information and lack of convenience due to news in smartphones. The similar phenomenon was experienced where Nomophobia leads extensively to I-FoMO which mediates the relationship of No-mobiles and investor behaviour. The study provides a new dimension to the theoretical frameworks in behavioural finance where media studies and information dissemination through smartphones to understand investor behaviour. The study not only validates NMP Questionnaire in media studies but also investigates the new scale of I-FoMOin behavioural finance to understand the aspects of fear and anxiety among human behaviour in Information Systems (IS) Research.

Opportunities for improving the insider laws: A comparative analysis of the practice in the USA and Russia

2020 ◽  
Vol 26 (4) ◽  
pp. 796-814
Author(s):  
E.K. Ovakimyan
Keyword(s):  
Financial Markets ◽  
Insider Trading ◽  
Negative Impact ◽  
Business Environment ◽  
Market Manipulation ◽  
Insider Information ◽  
Analysis And Synthesis ◽  
The Usa ◽  
Legislative Perfection ◽  
Definition Of

Subject. The article examines the laws regulating insider trading. Objectives. The study outlines recommendations for refining Law On Countering the Illegal Use of Insider Information and Market Manipulation and Amendments to Some Legislative Acts of the Russian Federation, № 224-ФЗ of July 27, 2010. Methods. The methodological framework includes a general dialectical method, analysis and synthesis, induction and deductions, and some specific methods, such as comparative and formal logic analysis to specify the definition of insider information, structural logic and functional analysis to improve the mechanism for countering insider trading and market manipulation. Results. We discovered key drawbacks to be addressed so as to improve the business environment in Russia. Although the Russia laws mainly mirror the U.S. laws, they present a more extended list of terms concerning the insider information. I believe the legislative perfection should be continued. Conclusions and Relevance. The study helps apply the findings to outline a new legislative regulation or amend the existing ones, add a new mention on the course of financial markets to students’ books, develop new methods for detecting and countering and improving the existing ones. If all parties to insider relationships use the findings, they will prevent insider trading crimes in financial markets and (or) reduce the negative impact of such crimes on the parties.

The profitability of algorithmic trading systems based on football sentiment

2020 ◽  
Vol 42 (1) ◽  
pp. 33-46
Author(s):  
Raúl Gómez-Martínez ◽  
Camila Marqués-Bogliani ◽  
Jessica Paule-Vianez
Keyword(s):  
Financial Markets ◽  
Investment Decisions ◽  
Futures Market ◽  
Algorithmic Trading ◽  
Investment Strategies ◽  
Measurable Effect ◽  
Behavioural Finance ◽  
Trading Systems ◽  
European Football

Behavioural finance has shown that investment decisions are the result of not just rational but also emotional brain processes. On the assumption that emotions affect financial markets, it would seem likely that football results might have a measurable effect on financial markets. To test this, this study describes three algorithmic trading systems based exclusively on the results of three top European football teams (Juventus, Bayern München and Paris St Germain) opening long or short positions in the next market season of the futures market of the index of each country (MIB (Milano Italia Borsa), DAX (Deutscher Aktien Index) and CAC (Cotation Assistée en Continu). Depending on the outcome of the last game played a long position was taken after a victory and a short position after a draw or defeat. The results showed that the algorithmic systems were profitable in the case of Juventus and Bayern whereas in the case of PSG, the system was profitable, but in an inverse way. This study shows that investment strategies that take account of sports sentiment could have a profitable outcome.

Behavioural, Socio-economic Factors, Financial Literacy and Investment Decisions: Are Men More Rational and Women More Emotional?

2021 ◽  
pp. 001946622098702
Author(s):  
Swati Prasad ◽  
Ravi Kiran ◽  
Rakesh Kumar Sharma
Keyword(s):  
Financial Literacy ◽  
Structural Equation ◽  
Investment Decisions ◽  
Jel Classification ◽  
Economic Factors ◽  
Fund Managers ◽  
Multivariate Technique ◽  
Retail Investors ◽  
Behavioural Factors ◽  
Socio Economic Factors

This study covers the gender-wise analysis of how behavioural factors and socio-economic factors along with the level of financial literacy influence investment decisions of Indian retail investors. Equally pertinent is to understand that will it have a different influence and bearing on males and females. Multivariate technique partial least squares-structural equation modelling (PLS-SEM) has been applied to develop the model and analyse the results. The study used a structured questionnaire for collecting data from retail investors. The findings of PLS-SEM show that in both genders, behavioural factors, socio-economic factors and financial literacy factors significantly affect investment decisions. However, the findings demonstrate that for women investors, the model is more effective. This study may be useful for prospective fund managers as, in many earlier studies, women are considered to be risk aversive. The results demonstrate that there is a need to target women, and the scenario today is not similar to the pre-existing ones. JEL Classification: G110, G4

Heuristic biases in investment decision-making and perceived market efficiency

2018 ◽  
Vol 10 (1) ◽  
pp. 85-110 ◽  
Author(s):  
Syed Zulfiqar Ali Shah ◽  
Maqsood Ahmad ◽  
Faisal Mahmood
Keyword(s):  
Financial Markets ◽  
Market Efficiency ◽  
Negative Impact ◽  
Investment Decisions ◽  
Sampling Technique ◽  
Investment Strategy ◽  
Individual Investors ◽  
Content Type ◽  
Specific Investment ◽  
The Relationship

Purpose This paper aims to clarify the mechanism by which heuristics influences the investment decisions of individual investors, actively trading on the Pakistan Stock Exchange (PSX), and the perceived efficiency of the market. Most studies focus on well-developed financial markets and very little is known about investors’ behaviour in less developed financial markets or emerging markets. The present study contributes to filling this gap in the literature. Design/methodology/approach Investors’ heuristic biases have been measured using a questionnaire, containing numerous items, including indicators of speculators, investment decisions and perceived market efficiency variables. The sample consists of 143 investors trading on the PSX. A convenient, purposively sampling technique was used for data collection. To examine the relationship between heuristic biases, investment decisions and perceived market efficiency, hypotheses were tested by using correlation and regression analysis. Findings The paper provides empirical insights into the relationship of heuristic biases, investment decisions and perceived market efficiency. The results suggest that heuristic biases (overconfidence, representativeness, availability and anchoring) have a markedly negative impact on investment decisions made by individual investors actively trading on the PSX and on perceived market efficiency. Research limitations/implications The primary limitation of the empirical review is the tiny size of the sample. A larger sample would have given more trustworthy results and could have empowered a more extensive scope of investigation. Practical implications The paper encourages investors to avoid relying on heuristics or their feelings when making investments. It provides awareness and understanding of heuristic biases in investment management, which could be very useful for decision makers and professionals in financial institutions, such as portfolio managers and traders in commercial banks, investment banks and mutual funds. This paper helps investors to select better investment tools and avoid repeating expensive errors, which occur due to heuristic biases. They can improve their performance by recognizing their biases and errors of judgment, to which we are all prone, resulting in a more efficient market. So, it is necessary to focus on a specific investment strategy to control “mental mistakes” by investors, due to heuristic biases. Originality/value The current study is the first of its kind, focusing on the link between heuristics, individual investment decisions and perceived market efficiency within the specific context of Pakistan.

Uncharted waters: Investors get access to foreign exchange-traded funds

2021 ◽  
pp. 54-70
Author(s):  
S. R. Moiseev
Keyword(s):  
Financial Markets ◽  
Foreign Exchange ◽  
Driving Forces ◽  
Market Competition ◽  
Secondary Market ◽  
Portfolio Diversification ◽  
Exchange Traded Funds ◽  
Investment Funds ◽  
Retail Investors ◽  
Securities Trading

In 2022, Russian investors will get access to the wide possibilities of the global financial market. The Bank of Russia opens the market for foreign exchange-traded funds (ETFs) — one of the main savings instruments for households. The economy of ETFs differs from other investment funds, whose shares do not have secondary market. The opening of the ETFs market is intended to solve a number of issues for retail investors: moving away from the preference to individual foreign shares towards portfolio diversification, cost reduction, ensuring sustainable profitability, abandoning the aggressive securities trading, and supporting market competition. Soon, ETFs will be one of the driving forces in financial markets. However, their rapid growth is fraught with little-studied effects.

scholarly journals Monetary Policy Surprises over Time

2018 ◽  
Vol 08 (01) ◽  
pp. 1840002 ◽  
Author(s):  
Marcello Pericoli ◽  
Giovanni Veronese
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Interest Rates ◽  
Euro Area ◽  
Yield Curve ◽  
Sovereign Spreads ◽  
Definition Of ◽  
Term Premia ◽  
The Impact ◽  
Over Time

We document how the impact of monetary surprises on euro-area and US financial markets has changed from 1999 to date. We use a definition of monetary policy surprises, which singles out movements in the long-end of the yield curve — rather than those changing nearby futures on the central bank reference rates. By focusing only on this component of monetary policy, our results are more comparable over time. We find a hump-shaped response of the yield curve to monetary policy surprises, both in the pre-crisis period and since 2013. During the crisis years, Fed path-surprises, largely through their effect on term premia, account for the impact on interest rates, which is found to be increasing in tenor. In the euro area, the path-surprises reflect the shifts in sovereign spreads, and have a large impact on the entire constellation of interest rates, exchange rates and equity markets.

Czech and Slovak Society

1993 ◽  
Vol 28 (4) ◽  
pp. 479-495 ◽  
Author(s):  
Jiří Musil
Keyword(s):  
Structural Analysis ◽  
List Type ◽  
Cultural Institutions ◽  
Definition Of The Situation ◽  
Czechoslovak Society ◽  
Slovak Society ◽  
The Difference ◽  
Definition Of ◽  
Czech Lands ◽  
Political Economic

THIS STUDY IS ONE OF COMPARATIVE STRUCTURAL ANALYSIS deliberately avoiding a sociological definition of the situation. It is assumed that two societies had existed in Czechoslovakia for some time and the difference between them, and possible analogies, are examined. There is also an assumption that the division of Czechoslovakia occurred especially because ‘Czechoslovak society’ as such had not yet been established; this was in spite of the fact that the two societies, at the time of the split, had substantially more in common than they had had at the time of Czechoslovakia's formation. There exists the view, which we want to verify, that during the decline of the federation the following factors were significant:1. The differences in economic, social, cultural and dispositional structures;2. The asynchronous and differing processes of modernization in both societies;3. The different consequences of the formation of societies of Soviet type in the Czech Lands in Slovakia;4. The differing processes for rectification of political, economic and cultural institutions in both republics after November 1989.

Blending Technology, Human Potential, and Organizational Reality

Big Data ◽  
2016 ◽  
pp. 1422-1451
Author(s):  
Jurgen Janssens
Keyword(s):  
Big Data ◽  
Added Value ◽  
Human Potential ◽  
Project Approach ◽  
True Value ◽  
Big Picture ◽  
Data Ecosystem ◽  
Definition Of ◽  
Complementary Actions ◽  
Organizational Reality

To make the deeply rooted layers of catalyzing technology and optimized modelling gain their true value for education, healthcare or other public services, it is necessary to prepare well the Big Data environment in which the Big Data will be developed, and integrate elements of it into the project approach. It is by integrating and managing these non-technical aspects of project reality that analytics will be accepted. This will enable data power to infuse the organizational processes and offer ultimately real added value. This chapter will shed light on complementary actions required on different levels. It will be analyzed how this layered effort starts by a good understanding of the different elements that contribute to the definition of an organization's Big Data ecosystem. It will be explained how this interacts with the management of expectations, needs, goals and change. Lastly, a closer look will be given at the importance of portfolio based big picture thinking.

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