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The goal of this paper is to present an original and simple analysis aimed to understand why investing in capital markets can be very dangerous for "naive investors". Stock markets display often exploding volatility. They are characterized by instability and subject to external shocks. If...
Persistent link: https://www.econbiz.de/10009569717
investment and exercise motive than performance seeking. …
Persistent link: https://www.econbiz.de/10010412100
While Merton (1987) proposes that firm value increases with the number of shareholders, relatively few studies have explicitly sought to identify the factors that affect investor participation per se in equity markets. Using a unique dataset that measures the inflow and outflow of equity...
Persistent link: https://www.econbiz.de/10013133071
This survey introduces and reviews the field of behavioral finance. It outlines the traditional finance approach, which builds upon rational acting investors, its assumptions, and its shortcomings. Moreover, it surveys the main findings from psychology and sociology that contrast with this...
Persistent link: https://www.econbiz.de/10013134285
Behavioural Finance has emerged as a serious contender to the Efficient Markets Hypothesis in the study of asset pricing and capital markets. A major tenet on which it rests is the investor's aversion to loss-induced regret and the consequent tendency to hold losing stocks too long and sell...
Persistent link: https://www.econbiz.de/10013136008
outperformance of the mutual funds that held less liquid stocks was primarily due to superior performance in down markets, especially …
Persistent link: https://www.econbiz.de/10013115030
We examine the trading behavior of institutional investors in the Exchange Traded Fund (ETF) market from 1993 to 2007. We concentrate on the relation between cross-sectional institutional ETF ownership and returns, particularly on the relation between changes in ownership and future returns,...
Persistent link: https://www.econbiz.de/10013120092
Passive investing, particularly in emerging markets, has become an increasingly popular means of quick, “diversified” exposure to a particular segment of the markets. Defensive investors, as Benjamin Graham noted, would be best served owning a diversified list of leading companies. Yet it's...
Persistent link: https://www.econbiz.de/10013121779
The correlation of returns for various equity asset classes has been high. In addition, the range or "dispersion" of returns across asset classes - and across sectors within those asset classes - has been low. These factors have made it difficult for active managers to outperform. But dispersion...
Persistent link: https://www.econbiz.de/10013121789
In “Benjamin Graham and Risk”, Brandes Institute Advisory Board member Bruce Grantier examines the similarities and differences between the modern portfolio theory concept of risk and the writings of Benjamin Graham and other prominent value investors. This article is part of an ongoing...
Persistent link: https://www.econbiz.de/10013121955