Individual Investors and the Financial Crisis

This paper documents the relationship between foreign and local analysts’ recommendations and subsequent trades done by different investor groups – foreign investors, local institutional investors, and local individual investors. Using analysts’ recommendations and investors’ trading data from South Korea, we show that foreign analysts’ buy recommendations and local analysts’ sell recommendations generate significantly more subsequent trade than their respective counterpart recommendations (i.e. local analysts’ buy and foreign analysts’ sell recommendations) during the Asian financial crisis of 1997-98. We argue that the ability of foreign analysts’ buy recommendations and local analysts’ sell recommendations to generate trade is responsible for superior performance foreign analysts’ buy recommendations and local analysts’ sell recommendations in emerging stock markets. We also show that earlier explanations proposed to explain the asymmetric performance of foreign and local analysts’ recommendations do not hold in our sample period.

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CAN INDIVIDUAL INVESTORS BENEFIT FROM TECHNICAL ANALYSIS IN MARKETS OF SOFT COMMODITIES? EMPIRICAL STUDY FOR 2010–2018

Acta Scientiarum Polonorum - Oeconomia ◽

10.22630/aspe.2020.19.2.14 ◽

2020 ◽

Vol 19 (2) ◽

pp. 25-32

Author(s):

Anna Górska ◽

Monika Krawiec

Keyword(s):

Financial Crisis ◽

Empirical Study ◽

Orange Juice ◽

Technical Analysis ◽

Commodity Markets ◽

Individual Investors ◽

Moving Averages ◽

2008 Financial Crisis ◽

The 2008 Financial Crisis ◽

Commodities Markets

After the 2008 financial crisis, many investors diversified their portfolios with different commodities, including the so-called softs. This paper aims to answer the question of whether individual investors can benefit from technical analysis on soft commodity markets. The empirical study is based on daily quotations of six soft commodities: coffee, cocoa, sugar, cotton, rubber and frozen concentrated orange juice from 2010 to 2018, and investigates the profitability of applying indicators and oscillators based on moving averages with different length. The results show that the application of five-day simple and weighted moving averages and momentum oscillators was most effective, providing positive returns in five out of six soft commodities markets.

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