scholarly journals Investor behavior patterns in the financial market

2021 ◽  
Vol 2 (99) ◽  
pp. 337-352
Author(s):  
O. M. Varchenko ◽  
I. V. Artimonova ◽  
K. V. Tkachenko ◽  
O. O. Varchenko
Keyword(s):  
Latin American ◽  
Financial Market ◽  
Banking System ◽  
Risk Tolerance ◽  
Investor Behavior ◽  
Individual Investors ◽  
Market Sentiment ◽  
Detailed Classification ◽  
Similarities And Differences ◽  
Components Of Behavior

The article summarizes the approaches to the formation of the model of investor behavior and identifies the cause and effect relationships between the actions of individual financial market players, highlights their sustainable priorities and irrational components of behavior, as well as market conditions and experience. It is argued that in unstable conditions the behavior and opinion of individual investors is transformed into collective behavior and market sentiment on the basis of which stable advantages of investors are formed: macroeconomic status, market maturity, political and social structure, values, quality of life, human capital. The characteristics of the investor behavior model that take into account both sustainable priorities and the irrational component are presented, and a detailed classification of investor behavior models is proposed. The Asian, Islamic, Latin American and post-Soviet models are singled out and characterized, the similarities and differences between them are highlighted. It is proposed to understand the model of investor behavior as sustainable benefits (risk, expected levels of return, liquidity, propensity to invest in certain financial instruments) and the consequent consistent actions of market players, as well as a set of factors that explain it, including expectations moment of time. It is substantiated that the behavior of investors is also explained by the irrational component (anomalies, stress response, etc.). It is proved that emerging markets are more volatile than developed ones, are in a state of instability and a significant manifestation of the irrational component, which must be taken into account when assessing their behavioral characteristics. The Asian, Islamic, Latin American and post-Soviet models are singled out and characterized, the similarities and differences between them are highlighted. It is established that the Latin American and post-Soviet models of investor behavior are similar in the following characteristics: low risk tolerance, high income orientation, prominent role of the banking system, concentration of property, behavioral anomalies, manipulation and corruption, high collectivism.

scholarly journals Financial Market Participation Of Immigrants And Native-Born Americans: The Role Of Income Uncertainty

2011 ◽  
Vol 8 (5) ◽  
Author(s):  
Swarn Chatterjee
Keyword(s):  
Financial Market ◽  
The United States ◽  
Risk Tolerance ◽  
Individual Investors ◽  
Financial Asset ◽  
Asset Ownership ◽  
Market Participation ◽  
Income Uncertainty ◽  
Financial Market Participation

This paper uses the National Longitudinal Survey dataset to examine the role of income uncertainty in explaining the likelihood of financial asset ownership among native-born and immigrant Americans. After controlling for a number of socioeconomic, demographic and behavioral factors, the results suggest that individual investors who face greater income uncertainty are less likely to own financial assets. This relationship holds true for immigrants and native-born Americans. Additionally, the likelihood of financial asset ownership increases with income, risk tolerance, and educational attainment for immigrants as well as for natives. Results also suggest that financial market participation among immigrants increases with the number of years they remain in the United States.

DOLARIZATION OF THE FINANCIAL MARKET OF UKRAINE: CAUSES, EVOLUTION, CONSEQUENCES

2021 ◽  
Vol 1 (21(49)) ◽  
pp. 56-66
Author(s):  
Ihor Krupka
Keyword(s):  
Interest Rates ◽  
Financial Market ◽  
Foreign Currency ◽  
Banking System ◽  
Market Potential ◽  
National Currency ◽  
Foreign Banks ◽  
Stable Operation ◽  
Negative Consequences ◽  
International Financial Market

The purpose of the article is to assess the level of domestic financial market dollarization, find out the causes of this economic phenomenon, trace its evolution and identify current features, substantiate proposals to minimize the negative consequences for the financial market and the economy in general. The methods of theoretical analysis, synthesis and generalization, analysis of statistical data and its graphical interpretation are used in the research. The results of the research showed that the main reasons for dollarization in Ukraine were high inflation and sharp fluctuations in the exchange rate of the national currency. In general, the dollarization of national financial markets occurs through the following channels: 1) borrowing on the international financial market; 2) the entrance of foreign banks to a domestic market; 3) investing abroad, when a national financial market is not sufficiently developed to create high-quality and highly liquid assets, dollarization provides rapid access to foreign financial assets and optimization of the profitability and risk structure of an investment portfolio; 4) the difference (spread) between interest rates in national and foreign currency. Based on the study of the domestic financial market, the following conclusions are made: 1) the level of Ukraine`s financial market dollarization in the aggregate and in terms of its separate segments is high; 2) this level poses a threat to the stable operation of financial intermediaries and the banking system in case of the national currency devaluation; 3) currency imbalance of assets and liabilities in the banking system has strongly decreased since 2008, but is still significant; 4) foreign currency is widely used by economic agents in the shadow sector of the economy. We consider the current dollarization level dangerous for the development of the country's financial system, and its reduction to a scientifically sound natural level should become one of the main tasks of the National Bank of Ukraine. Achieving the natural dollarization level and effective use of the domestic financial market potential will allow to intensify Ukraine's national economy development and promote integration into the international financial market and the global financial space.

scholarly journals An Empirical Study of Private Saving in Brazil

2003 ◽  
Vol 23 (1) ◽  
pp. 124-137 ◽  
Author(s):  
CLAUDIO PAIVA ◽  
SARWAT JAHAN
Keyword(s):  
Fiscal Policy ◽  
Empirical Study ◽  
Empirical Analysis ◽  
Latin American ◽  
Financial Market ◽  
Market Reforms ◽  
Private Saving ◽  
Private And Public ◽  
Additional Support ◽  
Latin American Countries

ABSTRACT This paper provides an empirical analysis of the determinants of private saving in Brazil during 1965-2000. Our estimates indicate that the degree of offset between private and public saving is relatively high, in line with evidence for other Latin American countries, although it may have started to decline in recent years. In any case, fiscal policy is identified as one of the main instruments to promote the much needed increase in national saving in Brazil. Additional support to savings could come from continued financial market reforms and trade diversification.

Retail Investors’ Financial Risk Tolerance and Risk-taking Behaviour: The Role of Psychological Factors

2021 ◽  
pp. 231971452110582
Author(s):  
Pragati Hemrajani ◽  
Rajni ◽  
Rahul Dhiman
Keyword(s):  
Risk Taking ◽  
Psychological Factors ◽  
Structural Equation ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Individual Investors ◽  
Financial Advisors ◽  
Research Model ◽  
Financial Risk Tolerance

The aim of this article is to look at how two psychological factors affect financial risk tolerance (FRT) and financial risk-taking behaviour (FRB) of individual investors. The study also investigates the role of FRT in mediating the relationship between psychological factors and FRB. A standardized questionnaire was used to collect the information. For the study, a total of 303 completed questionnaires were used. The proposed research model was validated and assessed using partial least squares structural equation modelling. The findings revealed some important experiences. Emotional intelligence and impulsiveness have a significant relationship with both FRT and FRB, according to the results. The findings also support FRT’s position as a mediating factor in the proposed research model. The results emphasize the importance of psychological factors in determining an individual’s FRT and FRB. FRT is a complex mechanism that entails more than just psychological considerations. As a result, further research is needed to decide which additional factors financial advisors can use to increase the explained variance in FRT inequalities.

Improvement of Premium Banking Services: The Need and the Potential

2021 ◽  
pp. 158-176
Author(s):  
Tatiana V. Schastnaya ◽  
◽  
Arina V. Horoshilova ◽  
Keyword(s):  
Financial Market ◽  
Commercial Banks ◽  
Banking System ◽  
Quality Parameters ◽  
Economic Interests ◽  
Banking Services ◽  
Balanced Development ◽  
Real Value ◽  
Financial Awareness ◽  
Market Premium

The need for a transition to an intensive and innovative development path is overdue in the banking system of Russia. The quality parameters of the premium banking service program for top-5 banks were analyzed. Factors of interest to the banks and their clients were identified. Suggestions on possible ways to improve premium banking programs were formulated. For the analysis, the authors selected banks with the most interesting bonus programs. The contextual analysis of the qualitative parameters of the premium banking programs allowed identifying these programs’ important components and possible problems. These are: the digitalization of banking services, which actively penetrates the segment of the wealthy client; lower business margins; search for the real value of a premium service for the customer. In the authors’ opinion, the most urgent problem is the combination of trends in the digitalization of the banking services and the needs of individualization of the approach to servicing a premium client. The main directions for improving premium banking programs were formulated. They are associated with improving the skills of the program staff; searching for new additional offers and organizing operational feedback for this; expanding the line of financial products offered to premium customers, for example, investment and insurance products, legal services. Premium banking provides a premium client with a special status in terms of service individualization, involves working with target segments, and offers bonus programs of banking products and services aimed at specific target audiences. Therefore, premium banking encourages the bank to identify and differentiate different target groups (audiences) by income level, investment goals, etc.; to conduct events (training seminars, conferences, presentations) to attract individuals to the financial market. Premium banking provides a balance between the economic interests of the company, the financial market and the banking system, commercial banks and individuals. Therefore, the task of developing this segment of the banking services market becomes relevant, meeting the modern needs of the economy. Primarily, the introduction and improvement of premium banking are beneficial to commercial banks themselves, as it increases their level of competitiveness, contributes to the formation of customer loyalty, thus allowing for a more complete satisfaction of customer needs in special services. Currently, improvements in premium banking could also contribute to raising the financial awareness of private clients concerning investment opportunities in the financial markets that would provide effective and balanced development of the financial market of Russia.

Financial Market in Nepal

2020 ◽  
pp. 794-842
Author(s):  
Narayan Prasad Paudel
Keyword(s):  
Private Sector ◽  
Financial Market ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Legal Framework ◽  
Capital Gains ◽  
Individual Investors ◽  
Infrastructure Development ◽  
Private Sector Development

The Nepalese financial sector is attributed of banking sector and non-banking sector. There is exponential growth in the number of financial institutions in Nepal in the last decade. The existing legal framework and institutional setup in Nepal is not conducive to the overall financial sector and private sector development and thus there is an urgent need for reformation in these sectors. The major impediments to private sector involvement in infrastructure development projects include the political and administrative instability; lack of consistent planning; lack of effective institutional support in designing and development of private sector infrastructure projects. Talking about the capital market and capital gains In Nepal, capital gains on securities transactions are taxed as ordinary income to corporations and individual investors while in most of the emerging markets capital gains on investments in stocks and bonds are not taxed, which need to be reformed as per the international practices.

Impact of Personality Traits on Risk Tolerance and Investors' Decision Making

2019 ◽  
Vol 8 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Misbah Sadiq ◽  
Hareem Amna
Keyword(s):  
Personality Traits ◽  
Big Five ◽  
Descriptive Analysis ◽  
Investment Decisions ◽  
Risk Tolerance ◽  
Primary Data ◽  
Individual Investors ◽  
Confirmatory Factor ◽  
The Relationship ◽  
Practical Implications

This article investigates the relationships between personality traits, risk tolerance, and investment decisions and highlights the importance of personality traits in determining risk tolerance levels and investment decisions. Personality traits are classified according to the Big Five taxonomy: extroversion, agreeableness, conscientiousness, neuroticism and openness to experience. Primary data was collected from 330 individual investors from Islamabad. Descriptive analysis of the data was run on SPSS, reliability of the constructs was assessed through Confirmatory Factor Analysis (CFA), whereas, Structural Equational Modelling (SEM) was used to conduct hypothesis testing through path analysis. As per the results of CFA, the constructs were found to be reliable. Mediation analysis confirmed that risk tolerance partially mediated the relationship between personality traits and investment decisions. This study and results have theoretical and practical implications for the investors, financial planners and managers.

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