Afraid of the stock market

This study demonstrates the way investors psychological traits influence their financial behaviors in the stock market. Results from the Health and Retirement Study show that anxious individuals are reluctant to participate in the stock market and have a lower level of risky investments. Anxiety’s e...

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Veröffentlicht in:	Review of quantitative finance and accounting 2019-10, Vol.53 (3), p.773-810
Hauptverfasser:	Lim, Yuree, Kim, Kyoung Tae
Format:	Artikel
Sprache:	eng
Schlagworte:	Accounting/Auditing Anxiety Corporate Finance Econometrics Economics and Finance Finance Investments Operations Research/Decision Theory Original Research Retirement Securities markets Traumatic life events
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Beschreibung
Zusammenfassung:	This study demonstrates the way investors psychological traits influence their financial behaviors in the stock market. Results from the Health and Retirement Study show that anxious individuals are reluctant to participate in the stock market and have a lower level of risky investments. Anxiety’s effect is more pronounced for less educated investors, implying that anxiety about the unknown stock market drives this effect. Analysis of individual traumatic experiences as instruments for the current anxiety level suggests a causal effect of anxiety on investment decisions.
ISSN:	0924-865X 1573-7179
DOI:	10.1007/s11156-018-0766-x