scholarly journals Behavioural Finance: a Literature

2020 ◽  
Vol 8 (6) ◽  
pp. 2113-2116
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Systematic Study ◽  
Financial Service ◽  
Behavioural Finance ◽  
Individual Professional

Behavioral finance is a systematic study of investors’ investments in the stock market, and various investments avenues are available in the market, every individual, professional investors, and financial service firm’s deal with different securities for maximization of profits and minimization of risk during the process, so many biases knowingly and unknowingly involved by the investors.

scholarly journals Disposition Effect and Return Predictability in the Tunisian Stock Market

2017 ◽  
Vol 4 (1) ◽  
pp. 1
Author(s):  
Cheïma Hmida ◽  
Ramzi Boussaidi
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Stock Prices ◽  
Stock Price ◽  
Return Predictability ◽  
Capital Gains ◽  
Disposition Effect ◽  
Individual Investors ◽  
Long Run ◽  
Return Reversal

The behavioral finance literature has documented that individual investors tend to sell winning stocks more quickly than losing stocks, a phenomenon known as the disposition effect, and that such a behavior has an impact on stock prices. We examined this effect in the Tunisian stock market using the unrealized capital gains/losses of Grinblatt & Han (2005) to measure the disposition effect. We find that the Tunisian investors exhibit a disposition effect in the long-run horizon but not in the short and the intermediate horizons. Moreover, the disposition effect predicts a stock price continuation (momentum) for the whole sample. However this impact varies from an industry to another. It predicts a momentum for “manufacturing” but a return reversal for “financial” and “services”.

scholarly journals Improvement of the Financial Services Market in the Context of Ensuring the Financial Inclusion

2021 ◽  
Vol 8 (523) ◽  
pp. 127-134
Author(s):  
O. V. Zhulyn ◽  
Keyword(s):  
Behavioral Finance ◽  
Financial Literacy ◽  
Financial Services ◽  
Digital Technologies ◽  
Financial Service ◽  
Financial Inclusion ◽  
Low Incomes ◽  
Analytical Research ◽  
Low Levels ◽  
Theoretical Foundations

The article is aimed at studying the theoretical, organizational and methodical aspects of financial inclusion; conducting an analytical research on the development of financial inclusion and its impact on the welfare of the population; formation of recommendations for improving the financial services market in the conditions of ensuring the financial inclusion in Ukraine. The theoretical foundations of financial inclusion and its components are considered, the author suggests to enclose therein the speed and security of obtaining a financial service, which is provided with the help of digital technologies, which is relevant in the context of the COVID-19 pandemic. The carried out analytical studies of financial inclusion in the world and in Ukraine have shown that its level is constantly growing and there are sufficient prerequisites for its development, including in the financial market the maximum number of the population who will be able to benefit from the use of financial services. As a result of the analysis, a framework for financial inclusion has been developed that allows identifying entities that are often unwittingly excluded from the financial services market – due to low levels of financial literacy, low incomes or discrimination on the part of financial institutions. An important aspect of the implementation of the concept of financial inclusion is the motivation to use financial services, using behavioral finance methods for this – not only by those who are forced to exclude, but also those who voluntarily refused to use them. The publication proposes recommendations and instruments for improving the financial services market, which will increase the level of financial inclusion, which in turn will contribute to economic growth, mobilization of savings, their preservation and increase, introduction of innovations and development of entrepreneurship.

scholarly journals Behavioral finance and games: simulations in the academic environment

2017 ◽  
Vol 29 (77) ◽  
pp. 297-311 ◽  
Author(s):  
Eliana Marcia Martins Fittipaldi Torga ◽  
Francisco Vidal Barbosa ◽  
Alexandre de Pádua Carrieri ◽  
Bruno Pérez Ferreira ◽  
Márcia Hiromi Yoshimatsu
Keyword(s):  
Stock Market ◽  
Financial Market ◽  
Behavioral Finance ◽  
Social Cognitive ◽  
Financial Analysis ◽  
Participant Observation ◽  
Comprehensive Knowledge ◽  
Training Professionals ◽  
Emotional Aspects ◽  
The One

ABSTRACT The contribution from this study lies in its reflection on the factors that influence market efficiency, which requires a multidisciplinary view to analyze the intervening factors that impact results of the financial system. It also contributes by reflecting on the need for new approaches for training professionals who will go on to work in financial and related areas and preparing them by using different financial analysis techniques; by reflecting on the fact that analytical practices are influenced by social, cognitive, and emotional aspects, enabling the students to be better prepared to act in the financial market; by presenting various technical possibilities and providing more comprehensive knowledge to choose the one that best suits the object of analysis and their preferences; and by reflecting on different ways of perceiving investment opportunities and risk, which can be expanded on in other studies on the segmentation of clients according to their preferences in the investor market. The aim of this study was to analyze how social and psychological aspects influenced the decisions involved in simulated trading operations. The relevance lies in its discussion of the philosophical and epistemological position in finance, which suffers from a vision that only focuses on the rationality of means and does not explain the anomalies verified in the financial market. The study originated from the application of a company game simulating the work of stock market trading desk operators, applied in the Stock Market Operations course and using fundamental, technical, and graphical techniques. The population was intentional and made up of undergraduate and graduate students from one of the four best Brazilian federal universities. The data analysis was performed by analyzing the content of the questionnaires applied and the journal entries made during participant observation.

Is Technical Analysis Profitable even for an Amateur Investor?

2015 ◽  
pp. 255-269
Author(s):  
Vasileiou Evangelos
Keyword(s):  
Stock Market ◽  
Transaction Costs ◽  
Behavioral Finance ◽  
Investment Decisions ◽  
Technical Analysis ◽  
Moving Averages ◽  
Trading Rules ◽  
Trading Decisions ◽  
Transaction Fees

The purpose of this chapter is to examine if even the simplest trading rules could take advantage of the market's inefficiency and lead to profitable trading decisions. For this reason, this study examined the profitability of the simplest trading rules, using only the simple moving averages (SMA) rules that even an amateur investor could apply. In order to examine the specific issue a data sample from the Greek stock market during the period 2002-12 was used. The results suggest that even if one takes into account the most expensive transaction fees, the trading rules signal profitable investment decisions; therefore, even an amateur trader and/or investor who does not have a significant amount of money to invest (which may lead to reduced transaction costs) could take advantage of the market's inefficiency. Behavioral finance theories may provide some useful and alternative explanations regarding some of the reasons that contribute to the Greek stock market's inefficient environment.

scholarly journals Investor Sentiment in the Stock Market

2007 ◽  
Vol 21 (2) ◽  
pp. 129-151 ◽  
Author(s):  
Malcolm Baker ◽  
Jeffrey Wurgler
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Stock Prices ◽  
Investor Sentiment ◽  
Cash Flows ◽  
Individual Investors ◽  
Individual Investor ◽  
Top Down ◽  
Limits To Arbitrage ◽  
Future Cash Flows

Investor sentiment, defined broadly, is a belief about future cash flows and investment risks that is not justified by the facts at hand. The question is no longer whether investor sentiment affects stock prices, but how to measure investor sentiment and quantify its effects. One approach is “bottom up,” using biases in individual investor psychology, such as overconfidence, representativeness, and conservatism, to explain how individual investors underreact or overreact to past returns or fundamentals The investor sentiment approach that we develop in this paper is, by contrast, distinctly “top down” and macroeconomic: we take the origin of investor sentiment as exogenous and focus on its empirical effects. We show that it is quite possible to measure investor sentiment and that waves of sentiment have clearly discernible, important, and regular effects on individual firms and on the stock market as a whole. The top-down approach builds on the two broader and more irrefutable assumptions of behavioral finance—sentiment and the limits to arbitrage—to explain which stocks are likely to be most affected by sentiment. In particular, stocks that are difficult to arbitrage or to value are most affected by sentiment.

scholarly journals ABM with Behavioral Bias and Applications in Simulating China Stock Market

2015 ◽  
Vol 5 (4) ◽  
pp. 257-270 ◽  
Author(s):  
Guocheng Wang ◽  
Shiguo Zhang
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Conduction Mechanism ◽  
Agent Based Modeling ◽  
Behavioral Characteristics ◽  
Impulsive Behavior ◽  
Agent Based ◽  
China Stock Market ◽  
Internal Relations ◽  
Real Behavior

Abstract One of the most important advantage of ABM (Agent-Based Modeling) used in social and economic calculation simulation is that the critical behavioral characteristics of the micro agents can be deeply depicted by the approach. Why, what and how real behavior(s) should be incorporated into ABM and is it appropriate and effective to use ABM with HSCA collaboration and micro-macro link features for complex economy/finance analysis? Through deepening behavioral analysis and using computational experimental methods incorporating HS (Human Subject) into CA (Computational Agent), which is extended ABM, based on the theory of behavioral finance and complexity science as well, we constructed a micro-macro integrated model with the key behavioral characteristics of investors as an experimental platform to cognize the conduction mechanism of complex capital market and typical phenomena in this paper, and illustrated briefly applied cases including the internal relations between impulsive behavior and the fluctuation of stock’s, the asymmetric cognitive bias and volatility cluster, deflective peak and fat-tail of China stock market.

scholarly journals The stock market as a casino: Associations between costly excessive stock market trading and problem gambling

2021 ◽  
Author(s):  
Moritz Mosenhauer ◽  
Philip Warren Stirling Newall ◽  
Lukasz Walasek
Keyword(s):  
Stock Market ◽  
Problem Gambling ◽  
Behavioral Finance ◽  
Financial Literacy ◽  
Stock Trading ◽  
Convenience Sample ◽  
Problem Gamblers ◽  
Stock Portfolio ◽  
Stock Market Trading ◽  
Financial Losses

The stock market should be a unique kind of casino, where the average person wins money over time. However, previous research shows that excessive stock market trading can contribute to financial losses --- just like in any other casino. While gambling research has documented the adverse consequences of problem gambling, there has been comparatively less behavioral finance research on the correlates of excessive stock market trading. This study aimed to document whether excessive stock trading was positively associated with problem gambling, and whether this hypothesized association was robust to controlling for demographics, and objective measures of overconfidence and financial literacy in a convenience sample of 798 US investors. We found that self-reported relative stock portfolio turnover was positively associated with problem gambling, that this association was robust to controls, and occurred equally over investors of all self-reported portfolio sizes. This study showed that problem gamblers may also make suboptimal risky choices more generally, and that a behavioral dependence explanation for suboptimal investment decisions should be subject to further investigation in the behavioral finance literature.

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