Emotion, Fear and Superstition in the New Zealand Stockmarket

Boyle, Glenn; Hagan, Andrew; O’Connor, Rebecca E.; Whitwell, Nick

doi:10.2139/ssrn.388581

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2013

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“…A positive emotion before holidays could induce higher expectations for future cash flows or an underweighting of risk (Boyle et a/., 2004). The literature on seasonality anomalies indicates that holiday euphoria increases traders' willingness to invest in risky assets (e.g., Jacobs and Levy, 1988;Rystrom and Benson, 1989;Pettengill, 1993;Frieder and Subrahmanyam, 2004).…”

Section: Introductionmentioning

confidence: 99%

The pre-holiday effect and positive emotion in the Taiwan Stock Market, 1971–2011

Teng¹,

Liu²

2013

Investment Analysts Journal

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This study presents a behavioural explanation of the pre-holiday effect. For the period 1971 to 2011, we first find that the mean pre-holiday return in Taiwan's major stock market index is statistically significantly higher than the mean non-pre-holiday return. Second, the pre-holiday event offers a return that differs from that on non-pre-holidays in an economically significant manner. Third, the high return on pre-holidays is not attributable to risk, other calendar anomalies, nor macroeconomic factors. Finally, the pre-holiday effect is related to proxies for positive emotion among investors. We conclude that these findings are consistent with the positive emotion and the pre-holiday effect hypothesis.

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Section: Introductionmentioning

confidence: 99%