scholarly journals An Evaluation of the Factors Influencing Investors' Perception in Bangladesh Stock Market

2017 ◽  
Vol 12 (5) ◽  
pp. 89
Author(s):  
Jannatunnesa
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Stock Markets ◽  
Accounting Information ◽  
Primary Data ◽  
Individual Investors ◽  
Regulatory Body ◽  
Factors Affecting ◽  
Growing Stock ◽  
Market Perception

Behavioral finance deals with the influence of psychology on the behavior of financial practitioners and its subsequent impact on stock markets. Unlike the developed part of the globe, very limited research attempts have been undergone so far in the field of investors' behavior in the growing stock markets. However, the decisions of investors in an emergent market are generally influenced by behavioral finance rather than conventional finance. Thus, this study aims at analyzing the general behavior of individual investors in Bangladesh in terms of the factors affecting their stock market perception. The study is mainly based on primary data, collected particularly in the context of Bangladesh. In exposing the factors affecting the perception of individual investors, a number of statistical techniques under univartate, bivariate and multivariate analysis have been applied using SPSS. According to the study, Accounting Information is the most important factor influencing investors' decision, whereas Company Specific Attributes or Reputation is the least important factor. The findings of the study may offer important implications to the concerned parties, especially to the actual and potential investors, corporations’ management, investment managers, regulatory body, etc.

Segments Influencing Individual Investors Behavior And Their Investment Decision

2019 ◽  
Vol 118 (9) ◽  
pp. 154-160
Author(s):  
Dr. Kartikey Koti
Keyword(s):  
Decision Making ◽  
Social Factors ◽  
Stock Markets ◽  
Investment Decision ◽  
Individual Investors ◽  
Factors Affecting ◽  
The Social ◽  
Karnataka State ◽  
Essential Idea

The essential idea of this assessment is investigate the social factors affecting particular theorists' decisions making limit at Indian Stock Markets. In the examination coordinated standard of direct is Classified subject to two estimations the first is Heuristic (Decision making) and the resulting one is prospect.. For the assessment coordinated the data used is basic natured which is assembled through a sorted out survey from 100 individual money related authorities based out in Hubli and Dharwad city, Karnataka State in India on an accommodating way. The respondents were both sex and overwhelming part male were 68% . These theorists were having a spot with the age bundle between35-45 which is 38%. These respondents have completed their graduation were around 56%. These respondents had work inclusion of 5 to 10 years which is 45% and the majority of which were used in government portion which is 56%. Their compensation was between 4 to 6 Lakh and were fit for placing assets into business areas. The money related experts were widely masterminded placing assets into different portfolios like 32% in Share market and 20 % in Fixed store. These examiners mode to known various endeavor streets were through News, family and allies.  

Investment environment, stock market perception and stock investments after stock market crash

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammad Tariqul Islam Khan ◽  
Siow-Hooi Tan ◽  
Lee-Lee Chong ◽  
Gerald Guan Gan Goh
Keyword(s):  
Stock Market ◽  
Market Performance ◽  
Mediating Effect ◽  
Individual Investors ◽  
Investment Environment ◽  
Stock Market Crash ◽  
Content Type ◽  
Stock Market Performance ◽  
Market Perception ◽  
Stock Investments

PurposeThis study examines how the importance of external investment environment factors affect stock market perception, and how stock market perception affects stock investments after stock market crash witnessed by individual investors in one of the emerging stock markets.Design/methodology/approachA cross-sectional survey was administrated among 223 individual investors who experienced stock market crash in 2010–2011 in Bangladesh, and the proposed model was tested by the partial least squares-structural equation modeling PLS-SEM model.FindingsFindings show that the importance of Bangladesh's stock market performance, government policy, economic issues and neighboring country's stock market performance has effects on investors' stock market perception. This perception, in turn, decreases monthly stock trading and short-term investment horizon. The findings further show the mediating effect of stock market perception.Practical implicationsInvestors need to carefully consider the external investment environment when they form their stock market perception, as this perception drives stock investments. Analogously, regulators should ensure releasing timely and updated statistics on external investment factors.Originality/valueAddressing those investors who encountered stock market crash, a set of external investment environment issues, stock market perception and stock investments are new in the literature.

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 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 The Impact of Financial Information on Noise Traders: Based on the Perspective of Behavioral Finance

2020 ◽  
Vol 9 (1) ◽  
pp. 28
Author(s):  
Miao Jiang
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Investor Behavior ◽  
Individual Investors ◽  
Noise Traders ◽  
Healthy Development ◽  
Noise Trading ◽  
Financial Media ◽  
The Impact ◽  
Excessive Noise

<p>In China's incomplete stock market which mainly consists of retail games and short-term operations, both of the high stock turnover rate and P/E ratios reflect excessive noise trading. This article focuses on the characteristic that individual investors are susceptible to financial media information, combined with the development and characteristics of financial media. From the perspective of behavioral finance, this paper analyzes the impact of financial media on noise trading. Using behavioral finance and psychology-related knowledge, investor behavior can be better understood, so as the motivation behind noise trading. Finally, in order to promote the healthy development of the stock market, this paper makes recommendations to improve the efficiency of the capital market.</p>

Examining investors' sentiments, behavioral biases and investment decisions during COVID-19 in the emerging stock market: a case of Pakistan stock market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shagufta Parveen ◽  
Zoya Wajid Satti ◽  
Qazi Abdul Subhan ◽  
Nishat Riaz ◽  
Samreen Fahim Baber ◽  
...  
Keyword(s):  
Developing Countries ◽  
Stock Market ◽  
Behavioral Finance ◽  
Stock Markets ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Disposition Effect ◽  
Content Type ◽  
Behavioral Biases ◽  
The Impact

PurposeThis study investigates the impact of the COVID-19 pandemic on investors' sentiments, behavioral biases and investment decisions in the Pakistan Stock Exchange (PSX).Design/methodology/approachThe authors have assessed investors' behaviors and sentiments and the stock market overreaction during COVID-19 using a questionnaire and collected data from 401 investors trading in the PSX.FindingsResults of structural equation modeling revealed that the COVID-19 pandemic affected investors' behaviors, investment decisions and trade volume. It created feelings of fear and uncertainty among market participants. Evidence suggests that behavioral heuristics and biases, including representative heuristic, anchoring heuristic, overconfidence bias and disposition effect, negatively influenced investors' decisions at the PSX.Research limitations/implicationsThis study will contribute to behavioral finance literature in the context of developing countries as it has revealed the impact of COVID-19 on the emerging stock market, and its results are generalizable to other emerging stock markets.Practical implicationsThe findings of this study will help academicians, researchers and policymakers of developing countries. Academicians can formulate new behavioral models that can depict the solutions of dealing with an uncertain situation like COVID-19. Policymakers like the Securities Exchange Commission and the PSX can formulate crisis management strategies based on behavioral finance concepts to cope with situations like COVID-19 in the future and help lessen investors' losses in the stock markets. The role of the Securities Exchange Commission is crucial as it regulates the financial markets. It can arrange workshops to educate investors to manage their decisions during crisis time and focus on the best use of irrational and rational decision-making at the same time using Lo (2004) adaptive market hypothesis.Originality/valueThe novelty of the paper is that the authors have introduced overconfidence and disposition effect as mediators that create a connection between representative and anchoring heuristics and investment decisions using primary data collected from investors (institutional and retail) to demonstrate the presence of psychological biases during COVID-19, and it has been done for the first time according to authors' knowledge. It is a contribution and addition to the behavioral finance literature in the context of developing countries' stock markets and their efficiency.

Impact of behavioral factors on investors’ financial decisions: case of the Egyptian stock market

2019 ◽  
Vol 12 (1) ◽  
pp. 30-55 ◽  
Author(s):  
Noura Metawa ◽  
M. Kabir Hassan ◽  
Saad Metawa ◽  
M. Faisal Safa
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Investor Sentiment ◽  
Investment Decisions ◽  
Demographic Characteristics ◽  
Individual Investors ◽  
Herd Behavior ◽  
Behavioral Factors ◽  
Content Type ◽  
Positive Effects

Purpose This paper aims to investigate the relationship between investors’ demographic characteristics (age, gender, education level and experience) and their investment decisions through behavioral factors (sentiment, overconfidence, overreaction and underreaction and herd behavior) as mediator variables in the Egyptian stock market. Design/methodology/approach This paper collects data from a structured questionnaire survey carried out among 384 local Egyptian, foreign, institutional and individual investors. This paper used a partial multiple regression method to analyze the effect of investors’ demographic characteristics on investment decisions through behavioral factors as the mediator variable. Findings Investor sentiment, overreaction and underreaction, overconfidence and herd behavior significantly affect investment decisions. Also, age, gender and the level of education have significant positive effects on investment decisions by investors. Experience does not play a significant role in investment decisions, but as investors gain experience, they tend to overlook the emotional factors. Practical implications The findings of this paper would help to understand common behavioral patterns of investors and indicate a path toward the growth of the Egyptian stock market. Originality/value There is a lack of research in behavioral finance covering Middle East and North African markets. This paper attempts to fulfill the gap by analyzing behavioral factors in the Egyptian market.

Analyzing causal relationships of effective factors on the decision making of individual investors to purchase shares

2019 ◽  
Vol 36 (1) ◽  
pp. 12-41
Author(s):  
Hossein Sayyadi Tooranloo ◽  
Pedram Azizi ◽  
Ali Sayyahpoor
Keyword(s):  
Decision Making ◽  
Stock Market ◽  
Stock Exchange ◽  
Individual Investors ◽  
Multi Criteria Decision Making ◽  
Causal Relationships ◽  
Content Type ◽  
Factors Affecting ◽  
Effective Factors

Purpose Changes in economic markets have made it necessary to understand the psychology of individual investors. Conducting effective studies on the decision of investors to buy stock in the stock market can be useful. Therefore, it is necessary to identify and prioritize the factors affecting the decision-making of investors to purchase shares of the stock exchange. The purpose of this study was to analyze causal relationships and to weight effective factors on individual investment to purchase shares of Tehran Stock Exchange. Design/methodology/approach The present study is applied research in the term of its purposes and a descriptive-survey one in the term of data gathering methods. The data required in this study was collected through library and field studies. The study population included 35 investment experts. In present study, multi-criteria decision-making techniques in type-2 fuzzy environments have been used to analyze the causal relationships and weighing the factors affecting individual investment in purchasing stock in the stock market. Findings In the study, 4 indicators and 20 sub-indicators influencing individual investors’ decision to purchase shares of Tehran Stock Exchange were selected based on the literature review in the field of investment in the stock exchange, as well as interviews with experts. Analyzing the opinions of experts showed that they have much paid attention to financial index compare to the economic, political and psychological indicators of the market in determining the priority of indicators. In analyzing sub-indicators, it was identified that Iranian investors pay special attention to economic and political developments, political news and international economic developments. Research limitations/implications The present study has been carried out in Iran, and therefore, is geographically limited to Iran. In thematic terms, it is limited to effective factors of individual investments in Tehran Stock Exchange. The statistical population of present study was limited to investing experts in Tehran Stock Exchange. The difference in financial, economic, social and political conditions of individuals was another limitation of present study. The main consequences of research were the explanation of causes of investors’ higher attention to financial factors than economic, political and mental factors of market in buying stocks. Originality/value Given the uncertainty in the market status, using multi-criteria decision-making techniques in financial analysis can help decision-makers to make better decisions. In addition, it would be possible to take into account many variables that do not have a mathematical aspect but are important in decision-making and lead to increased decision-making satisfaction. The research initially analyzed causal relationships of determinants of individual investment on stock exchange for buying stocks through a type-2 fuzzy approach.

scholarly journals Impact of Behavioral Factors in Making Investment Decisions and Performance: Evidence from Pakistan Stock Exchange

Market Forces ◽  
2021 ◽  
Vol 16 (1) ◽  
pp. 22
Author(s):  
Muhammad Rehan ◽  
Jahanzaib Alvi ◽  
Lubna Javed ◽  
Baber Saleem
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Individual Investors ◽  
Behavioral Factors ◽  
Factors Affecting ◽  
Investment Decision Making ◽  
The Impact

Market irregularities and irrational behavior triggered investor’s changes in the stock market, and this has led to an investigation into the impact of various behavioral biases and factors affecting decision-making for individual investors. The quality of individual investor behavior in making stock investment decisions is very important to be understood as a reference of the movement of the capital market. This study investigated the role of behavioral finance and investor psychology in investment decision-making at the Pakistan Stock Exchange (PSE). Using a sample of 147 individual investors, the study established that behavioral factors such as Herding, Heuristic, Market and Prospect that affected the decisions of the investors operating at the Pakistan Stock Exchange (PSE). As there are a few studies in Pakistan related to behavioral finance, so this study mainly contributes to the field of behavioral finance in Pakistan. This study focusses on existing theories of behavioral finance which led to develop the hypothesis. The result of the analysis is that the four variables have greatly influenced the investment decision and return on investment. All behavioral variables have a significant impact on the decision-making process of investors, which led to the acceptance of all assumptions regarding the level of influence of behavioral factors in decision making for individual investors

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