Understanding the Investment Behavior of Individual Investors

2021 ◽  
pp. 21-39
Author(s):  
Yavuz Bilgin ◽  
Selin Metin Camgoz ◽  
Mehmet Baha Karan ◽  
Yilmaz Yildiz
Keyword(s):  
Personality Traits ◽  
Negative Impact ◽  
Positive Impact ◽  
Personal Characteristics ◽  
Disposition Effect ◽  
Individual Risk ◽  
Individual Investors ◽  
Love Of Money ◽  
Risk Takers ◽  
The Individual

The FOREX market has become a popular ground amongst all kinds of market players. The leverage transactions of the market that may generate higher profit levels with low capital/investments make it very attractive for the individual risk takers. The research investigates the trading behavior of FOREX investors relying on the survey data collected from 167 Turkish investors in 2019. Within the scope of the research, the authors evaluate whether and to what extent behavioral factors, namely demographic characteristics; personal characteristics such as personality traits, love of money, and biases like disposition effect influence investment performance. The results reveal that among the personality traits, openness to experience and conscientiousness have a positive impact while disposition effect and love of money have a negative impact on the performance of investors. Additional analysis suggests that the effects of personality traits and biases on trading performance remarkably change among subgroups of investors regarding their income level.

Understanding the Investment Behavior of Individual Investors

2020 ◽  
pp. 228-246
Author(s):  
Yavuz Bilgin ◽  
Selin Metin Camgoz ◽  
Mehmet Baha Karan ◽  
Yilmaz Yildiz
Keyword(s):  
Personality Traits ◽  
Negative Impact ◽  
Positive Impact ◽  
Personal Characteristics ◽  
Disposition Effect ◽  
Individual Risk ◽  
Individual Investors ◽  
Love Of Money ◽  
Risk Takers ◽  
The Individual

The FOREX market has become a popular ground amongst all kinds of market players. The leverage transactions of the market that may generate higher profit levels with low capital/investments make it very attractive for the individual risk takers. The research investigates the trading behavior of FOREX investors relying on the survey data collected from 167 Turkish investors in 2019. Within the scope of the research, the authors evaluate whether and to what extent behavioral factors, namely demographic characteristics; personal characteristics such as personality traits, love of money, and biases like disposition effect influence investment performance. The results reveal that among the personality traits, openness to experience and conscientiousness have a positive impact while disposition effect and love of money have a negative impact on the performance of investors. Additional analysis suggests that the effects of personality traits and biases on trading performance remarkably change among subgroups of investors regarding their income level.

Entrepreneurship in regions: differentiated impacts of the socio cultural and gender types

2015 ◽  
Vol 28 (1) ◽  
pp. 45-76 ◽  
Author(s):  
Claudio Mancilla ◽  
José Ernesto Amorós
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Fear Of Failure ◽  
Content Type ◽  
Reference Models ◽  
Cultural Aspects ◽  
And Gender ◽  
The Individual ◽  
Practical Implications ◽  
Secondary City

Purpose The purpose of this paper is to study the differentiated impact of factors that influence the propensity to entrepreneur in a sample of people in Chile. A distinction is made between individuals that live in primary cities and secondary cities. The differentiating factors are socio‐cultural aspects (reference models – positive examples of entrepreneurs – and perception of social fear of failure) and the gender of the individual. Design/methodology/approach For the research data from the survey used in Chile by the Global Entrepreneurship Monitor for the years 2010 and 2011 were used. A logit model was used to determine the differentiated impact of the analysed factors and interactions were done using the method proposed by Corneliâen and Sonderhof (2009). Findings These showed that the fact that an individual lives in a secondary city decreases his entrepreneurship probability. The positive impact that the reference models have is weaker in women. Contrary to what was expected, the negative impact of the fear of failure perception is weaker in women. Practical implications These results have the implications to suggest focused public policies and differentiations that consider the socio‐cultural, territorial (focused in cities) and gender aspects. Originality/value The research contributes by giving empirical evidence of the existence of the negative impact of living in a secondary city and of differentiated effects of socio‐cultural factors from the gender perspective.

The HEXACO, academic motivation and learning approaches: evidence from a central Asian country

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Monowar Mahmood ◽  
Yuliya Frolova ◽  
Bhumika Gupta
Keyword(s):  
Personality Traits ◽  
Learning Strategies ◽  
Classroom Environment ◽  
Academic Motivation ◽  
Negative Impact ◽  
Positive Impact ◽  
Learning Approaches ◽  
Content Type ◽  
Central Asian ◽  
Motivation And Learning

PurposePersonality traits are assumed to influence cognitive processes as well as academic motivation and learning approaches of the students. Based on these assumptions, the present study investigates the association of HEXACO personality traits with academic motivation as well as influence of those traits on students' learning approaches in educational contexts.Design/methodology/approachSelf-reported measures of personality orientation, academic motivation and learning approaches were obtained from 404 respondents in a classroom environment. The SPSS 20 software was used to conduct the correlations and the hierarchical regression analyses. The Eviews 10 software was used to develop the structural equation model to find the inter-relations among the study variables.FindingsThe findings reveal the influence of personality traits on academic motivation and learning approaches of the students. Among different personality traits, consciousness appeared to have highly positive impact on deep learning and intrinsic motivation of the studies. Neuroticism appeared to have most negative impact related to surface learning and amotivation of the learning contents.Research limitations/implicationsThe findings validates the existence of HEXACO personality traits among the students in central Asian context. It future reiterated individual differences in learning strategies and learning motivation among the learners. The results may help academics and policy makers take appropriate measures to increase academic motivation and select appropriate learning approaches.Originality/valueThis is one of the pioneer studies to investigate the relationship between HEXACO personality traits, learning strategies and academic motivation. Validation of the HEXACO framework will help to understand students' personality in a more detailed and elaborative way and will contribute to the existing literature on personality and learning outcomes.

scholarly journals Socioeconomic Classes of University Students in Pakistan as Predictors of their Personality Traits: A Case Study

2021 ◽  
Vol 2 (2) ◽  
pp. 205-221
Author(s):  
Rafaqat Ali ◽  
Furrukh Bashir ◽  
Rashid Ahmad
Keyword(s):  
University Students ◽  
Personality Traits ◽  
Regression Models ◽  
Negative Impact ◽  
Positive Impact ◽  
Socioeconomic Class ◽  
Lower Socioeconomic ◽  
Negative Impacts ◽  
The Impact

The current study was heading for determining the impact of Pakistani university students’ socioeconomic classes on their personality traits. Demographic and personality questionnaires were filled by available university students online. The stepwise regression technique facilitated to generate regression models to define impacts of different socioeconomic classes on students’ different personality traits. Different regression models highlighted the significant negative impacts of the middle upper socioeconomic class on Agreeableness, Extraversion and Neuroticism personality traits. The lower socioeconomic class was found to have positive impact on only one personality sub-trait self-discipline. Whereas, the upper lower socioeconomic class caused positive impacts on students’ trust sub-trait, Conscientiousness trait and negative impact on excitement seeking sub-trait of personality. The importance of these impacts of socioeconomic classes on different personality traits and the possible implications are discussed with respect to university students’ academic performance and academic behaviour.

scholarly journals Irrational Behaviour and Stock Investment Decision. Does Gender Matter?

2021 ◽  
Vol 11 (2) ◽  
pp. 2185-2204
Author(s):  
M. Siraji ◽  
Na zar ◽  
M.S. Ishar Ali
Keyword(s):  
Risk Perception ◽  
Investment Decision ◽  
Primary Data ◽  
Disposition Effect ◽  
Individual Investors ◽  
Financial Advisors ◽  
Stock Investment ◽  
Irrational Behaviour ◽  
The Individual ◽  
The Right

The research aims to examine the influence of irrational behaviour on stock investment decision, specifically, anchoring, disposition effect, home bias, herding, overconfidence and the risk perception. The research further investigates the moderating role of gender between irrational behaviour and stock investment decision. Finally, it reveals which irrational behaviour is most prevalent. A survey collected the primary data from 425 individual investors. The survey evidence shows that, of six irrational behaviours, anchoring, disposition effect, overconfidence and risk perception were influence the investment decision of individual investors, and risk perception comes out to be the significant irrational behaviour on stock investment decision. It further explores that gender has a significant moderation for anchoring, disposition effect, herding, overconfidence, risk perception, and stock investment decision. We recommend that if individuals are aware of the behavioural biases, it will help them for making the right stock investment decisions. The study also relevant for financial advisors, stockbrokers and policymakers as it facilitates them in gaining a better understanding of their clients’ irrational behaviour. The present study gives a unique insight into the individual investors’ profile of gender corresponding to each main irrational behaviour on investment decision under consideration of stock investment.

scholarly journals Social and psychological adaptation of the personality of juvenile suspects, accused and convicted persons, with different attitude to the criminal subculture

2018 ◽  
Vol 8 (2) ◽  
pp. 113-124
Author(s):  
Yu.E. Dyachkova
Keyword(s):  
Pilot Study ◽  
Personality Traits ◽  
Negative Impact ◽  
Statistical Processing ◽  
Personal Characteristics ◽  
Psychological Adaptation ◽  
Juvenile Suspects

The article deals with the problem of the spread of criminal subculture among juvenile suspects, accused and convicted persons, their adherence to the rules, the laws of the criminal environment, as well as personal features that contribute to this. The key attention is paid to the study of social and psychological adaptation of minors in places of detention. It is assumed that there is a connection between the adherence to the norms of the criminal subculture and the personal characteristics of minors, the level of their social and psychological adaptation. The pilot study was attended by 23 juvenile boys aged 15 to 18 years, Russian, committed various crimes. The paper used review-analytical, psychodiagnostic methods, methods of mathematical and statistical processing. As a result, three types of minors are determined by the degree of their adherence to the norms of the criminal subculture, the features of social and psychological adaptation and the associated personality traits of juvenile suspects, accused and convicted persons are studied, and the correlation links between the integral indicators of social and psychological adaptation are established. The results can contribute to the development and implementation of psychoprophylactic and psychocorrection programs aimed at leveling the negative impact of criminal subculture norms among minors in isolation.

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.

scholarly journals Study of Investment Decisions and Personal Characteristics through Risk Tolerance: Moderating Role of Investment Experience

2020 ◽  
Vol 9 (34) ◽  
pp. 57-68
Author(s):  
Nasira Perveen ◽  
Ashfaq Ahmad ◽  
Muhammad Usman ◽  
Faiza Liaqat
Keyword(s):  
Positive Impact ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Personal Characteristics ◽  
Risk Tolerance ◽  
Individual Investors ◽  
Financial Advisors ◽  
Investment Experience ◽  
The Relationship

Investment decisions could be affected by behavioral biases associated with personal characteristics. This study empirically investigates the effect of personal characteristics on investors’ investment decision through risk tolerance. Furthermore, investment experience moderates the nexus between personal characteristics and risk tolerance. The scale consisting of 24 items was used related to selected constructs and variables. Data was collected form 175 individual investors of Pakistan Stock Exchange. PLS-SEM was used to make statistical analysis. The findings indicate that extraversion has substantial positive impact on investment decisions. Moreover, risk tolerance partially mediates the relationship between extroversion and investment decisions. The relationship between introversion and investment decisions is negative and risk tolerance partially mediates the aforesaid relationship. Furthermore, it is statistically proved that investment experience substantially moderates the association between extraversion and risk tolerance. However, investment experience does not play any conditional role in the association between introversion and risk tolerance. This study can be helpful for financial advisors to provide best consultancy to their clients (investors), while considering their personal characteristics.

A Bright Side to Family Firms: How Socioemotional Wealth Importance Affects Dark Traits–Job Performance Relationships

2019 ◽  
Vol 32 (4) ◽  
pp. 378-395
Author(s):  
Benjamin D. McLarty ◽  
Daniel T. Holt
Keyword(s):  
Job Performance ◽  
Personality Traits ◽  
Family Firms ◽  
Negative Impact ◽  
Performance Outcomes ◽  
Dark Triad ◽  
Socioemotional Wealth ◽  
Moderation Effect ◽  
Individual Level ◽  
The Individual

Examining socioemotional wealth’s influence at the individual level, an interactionist approach was used to test its moderation effect on the dark personality traits–job performance relationship, using supervisor-employee dyads in family firms. Termed the Dark Triad, dark personality traits include narcissism, psychopathy, and Machiavellianism. Results showed that when supervisors in family firms prioritize socioemotional wealth, the expected relationships between the Dark Triad and employee job performance outcomes (task, citizenship, and counterproductive behaviors) is ameliorated. These findings demonstrate that family firms can create an environment that improves the otherwise negative impact that dark personality has on job performance.

Elucidating investors rationality and behavioural biases in Indian stock market

2019 ◽  
Vol 11 (2) ◽  
pp. 201-219 ◽  
Author(s):  
Venkata Narasimha Chary Mushinada ◽  
Venkata Subrahmanya Sarma Veluri
Keyword(s):  
Structural Equation ◽  
Negative Impact ◽  
Personal Characteristics ◽  
Primary Data ◽  
Individual Investors ◽  
Content Type ◽  
Comprehensive Survey ◽  
Attribution Bias ◽  
Indian Stock Market ◽  
The Relationship

Purpose The purpose of this paper is to empirically test the relationship between investors’ rationality and behavioural biases like self-attribution, overconfidence. Design/methodology/approach The study applies structural equation modelling to understand whether individual investors, besides being rational, are subjected to self-attribution bias and overconfidence bias. Findings The study shows the empirical evidence in the support of behavioural biases like self-attribution and overconfidence existing besides investors’ rationality. Moreover, there is a statistically significant positive covariance found between self-attribution and overconfidence, implying that an increase/decrease in self-attribution results in the increase/decrease in overconfidence and vice versa. It is also observed that the personal characteristics of an investor such as gender, age, occupation, annual income and their trading experience have an impact on behavioural biases. Research limitations/implications The study focused on rational decision making, self-attribution and overconfidence biases using primary data. Further studies can be encouraged to test the existence of behavioural biases based on both market level and individual account data simultaneously. Practical implications Insights from the study suggest that the investors should perform a post-analysis of each investment, so that they become aware of past behavioural mistakes and stop continuing the same. This might help investors to minimise the negative impact of self-attribution and overconfidence on their expected utility. Originality/value To the best of the authors’ knowledge, this is the first study to examine the relationship among investors’ rationality, self-attribution and overconfidence in the Indian context using a comprehensive survey.

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