Individual Investor Perceptions And Behavior During The Financial Crisis Essay

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Individual investor perceptions and behaviour during the financial crisis
The main focus of this paper is on the financial crisis and the individual investor perceptions about it as well as the risk taking behaviour of the people. The paper discusses the aspects of risk perceptions and risk tolerance in regard to the significant fluctuations of the investor perceptions and the volatility of the return expectations. To understand these perceptions, a panel-data set has been used which combines the monthly survey data and the brokerage records. The sample era includes, on the one hand, the months when universal stock markets were hit toughest, that is, September and October 2008.
The research undertaken has a very constant effect on the investor psychology about the behaviour on risk taking and trading. A key discovery from such readings is that individual investors have trouble learning from their understandings, and if they learn, this is a slow and gradual process (Gervais and Odean, 2001; Seru et al., 2010). Furthermore, separate investors often fail to update their behaviour to compete their experiences and are comparatively unaware of their return performance (Glaser and Weber, 2007). Therefore, it seems that at least for the period of tranquil times, investors’ involvements have little or no effect on their perceptions and behaviours. Thaler and Johnson (1990) as well as Barberis (2013) discover that undergoing a number of successive losses decreases investors’
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