Repurchase behavior of individual investors, sophistication and regret

Magron, Camille; Merli, Maxime

doi:10.1016/j.jbankfin.2015.08.021

Cited by 18 publications

(7 citation statements)

References 54 publications

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“…Their survey results on investors in the Chinese futures market indicate that retail investors who differ in their personality characteristics may vary in their information acquisition and trading behaviours. At the same time, Magron and Merli (2015) and Lapanan (2018) employ a database of over a million trades from European brokers to investigate the behaviour of investors. Their results reveal that investors' buying decisions are similarly sensitive to the past positive and negative returns of socially responsible and conventional funds.…”

Section: Factors Influencing Trading Behaviourmentioning

confidence: 99%

Factors Influencing Retail Investors’ Trading Behaviour in the Thai Stock Market

Paisarn¹,

Chancharat²,

Chancharat³

2021

AABFJ

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This paper investigates trading behaviour among Thai retail investors in 2016. Using detailed survey data from 491 investors, we examine the characteristics and behavioural patterns that lead to investor bias. Empirical results in the behavioural finance literature indicate that retail investors may not behave reasonably. Behavioural biases may influence investor decisions and affect financial markets. These studies, however, are limited to subsamples of the overall investor groups studied and mainly focus on developed markets. We find that biases are common among investors and that men are more overconfident than women. Moreover, we discover that investors with more experience in trading are less likely to hold their stocks for long periods of time. Further, investors aged 45 and younger hold more diversified portfolios. Another finding is that participants with an income of more than 50,000 Baht a month and/or who employ a number of brokers hold more diversified portfolios. This evidence is consistent with the findings that have been reported for Turkey, India, and Vietnam, indicating that demographic factors are useful for distinguishing between investors in terms of the level of overconfidence bias they exhibit. This result confirms that demographic factors play a role in differentiating and classifying retail investors and should motivate future researchers to consider these factors in their research.

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Section: Factors Influencing Trading Behaviourmentioning

confidence: 99%

Factors Influencing Retail Investors’ Trading Behaviour in the Thai Stock Market

Paisarn¹,

Chancharat²,

Chancharat³

2021

AABFJ

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“…Compared to what is usually documented in the literature, our sample is representative of retail investors. In most empirical studies, the typical retail investor holds between 3 and 7 stocks in portfolio, depending on the sample (e.g., Barber and Odean (2000), Kumar and Lee (2006), Korniotis and Kumar (2013), Magron and Merli (2015)). Consistent with the presence of some large investors in our sample, the average monthly portfolio turnover 19 is high (4.02), while the corresponding median is low (0.05).…”

Section: Data and Samplementioning

confidence: 99%

Do retail investors bite off more than they can chew? A close look at their return objectives

D’Hondt¹,

Winne²,

Merli

2021

Journal of Economic Behavior & Organization

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Using information self-reported by retail investors in a risk-return profiling survey, we investigate the determinants of individual return objectives as well as the capacity of investors to reach them. Controlling for a large set of covariates, we provide empirical evidence that return objectives are related to subjective individual characteristics (such as financial literacy and risk tolerance), some sociodemographics (age, education), as well as recent past trading intensity. Retail investors with higher return objectives perform better, compared to their counterparts who want to avoid any risk of capital loss. The capacity to reach the return objective however decreases as the level of return objectives increases.

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“…Regret generally reduces the likelihood of repurchase (Magron & Merli, 2015), but being a 'blue chip' company somehow validated this particular decision.…”

Section: Regret and Corporate Associationsmentioning

confidence: 98%

Investor regret, share performance and the role of corporate agreeableness

Vohra

Davies

2020

Journal of Business Research

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Drawing on regret and reputation literatures, the authors demonstrate how positive corporate associations can mitigate the effects of share performance on investor regret. Three studies are presented, the first involved the observation of six investment club meetings. The second is a survey of investors exploring some of the findings of the first study, specifically the relationship between investor regret and corporate associations. The final study uses an experimental design to test whether corporate social responsibility (CSR) messaging can influence regret in the context of disappointing share performance by influencing corporate agreeableness. The main findings are that a range of corporate associations are important to investors, more so than actual share performance, in their decision-making. Specifically, the more agreeable (e.g. trustworthy, supportive) the company is perceived to be, the lower will be any regret felt over share performance. Finally, CSR information was found to affect regret via an influence on agreeableness.

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Repurchase behavior of individual investors, sophistication and regret

Cited by 18 publications

References 54 publications

Factors Influencing Retail Investors’ Trading Behaviour in the Thai Stock Market

Factors Influencing Retail Investors’ Trading Behaviour in the Thai Stock Market

Do retail investors bite off more than they can chew? A close look at their return objectives

Investor regret, share performance and the role of corporate agreeableness

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