This experimental paper investigates the impact of emotions on risk and return estimates of stocks. Participants rate well-known blue-chip firms on an emotional scale and forecast risk and return of the firms' stock. We find that positive emotions lead to a prediction of high return and low...

Prior studies provide only limited evidence on how and why investors rely on analyst forecasts. We investigate one aspect of this research paradigm by examining investor response to analyst forecast revisions using accounting restatements as a proxy for uncertainty. We find that investors tend...

We survey the textual sentiment literature, comparing and contrasting the various information sources, content analysis methods, and empirical models that have been used to date. We summarize the important and influential findings about how textual sentiment impacts on individual, firm-level and...

Recent research finds that investors, broadly defined, react to the linguistic tone of quarterly earnings conference calls; there is a positive relation between firms' stock returns and call tone (a measure of “sentiment” related word tabulations). However, this type of soft information can...

Merits of using fundamental research and technical research are different and these two different investment styles of investing in the stock market have its own following. The stock selection for investment portfolio which relies on the Fundamental Analysis have higher success rate than the...

In this paper we relate individual risk attitude as elicited by binary lotteries and certainty equivalents to market behavior. By analyzing 26 independent markets with a total of 280 participants we show that binary lottery choices and certainty equivalents are poorly correlated. Only lottery...

Using a comprehensive list of terrorist attacks over three decades, we find that aggregate investor risk aversion inversely relates to terrorist activity in the United States. A one standard deviation increase in the number of attacks each month leads to a $75.09 million drop in aggregate flows...

The arrival of “FinTech” – non-bank companies offering financial services through new technology – has changed the regulatory landscape of the financial markets. This is especially the case in the funds transfer market. While terrorist finance might have once been more at risk of...

I find that the index of geopolitical risk (GPR) is significantly associated with both the extensive and intensive margins of stock market participation decisions. The GPR index subsumes the significance of economic policy uncertainty for stock market participation decisions and has long-lasting...

We examine in an experiment the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both, investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent...