Individual Investors' Mutual Fund and Common Stock Share Selling Decisions: Different Strokes for the Same Folks

2005 ◽  
Author(s):  
Zoran Ivkovich ◽  
Scott J. Weisbenner
Keyword(s):  
Mutual Fund ◽  
Common Stock ◽  
Individual Investors ◽  
Selling Decisions ◽  
Stock Share

A study of prominence for disposition effect: a systematic review

2019 ◽  
Vol 11 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Syed Aliya Zahera ◽  
Rohit Bansal
Keyword(s):  
Mutual Funds ◽  
Behavioral Finance ◽  
Mutual Fund ◽  
Institutional Investors ◽  
Disposition Effect ◽  
Individual Investors ◽  
Content Type ◽  
Experimental Market ◽  
The Individual ◽  
The Impact

Purpose The purpose of this paper is to study the disposition effect that is exhibited by the investors through the review of research articles in the area of behavioral finance. When the investors are hesitant to realize the losses and quick to realize the gains, this phenomenon is known as the disposition effect. This paper explains various theories, which have been evolved over the years that has explained the phenomenon of disposition effect. It includes the behavior of individual investors, institutional investors and mutual fund managers. Design/methodology/approach The authors have used the existing literatures from the various authors, who have studied the disposition effect in either real market or the experimental market. This paper includes literature over a period of 40 years, that is, Dyl, 1977, in the form of tax loss selling, to the most recent paper, Surya et al. (2017). Some authors have used the PGR-PLR ratio for calculating the disposition effect in their study. However, some authors have used t-test, ANNOVA, Correlation coefficient, Standard deviation, Regression, etc., as a tool to find the presence of disposition effect. Findings The effect of disposition can be changed for different types of individual investors, institutional investors and mutual funds. The individual investors are largely prone to the disposition effect and the demographic variables like age, gender, experience, investor sophistication also impact the occurrence of the disposition effect. On the other side, the institutional investors and mutual funds managers may or may not be affected by the disposition effect. Practical implications The skilled understanding of the disposition effect will help the investors, financial institutions and policy-makers to reduce the adverse effect of this bias in the stock market. This paper contributes a detailed explanation of disposition effect and its impacts on the investors. The study of disposition effect has been found to be insufficient in the context of Indian capital market. Social implications The investors and society at large can gains insights about causes and influences of disposition effect which will be helpful to create sound investment decisions. Originality/value This paper has complied the 11 causes for the occurrence of disposition effect that are found by the different authors. The paper also highlights the impact of the disposition effect in the decision-making of various investors.

scholarly journals A Study Mutual Fund Investors Behavior in Kerala

2016 ◽  
Vol 5 (1) ◽  
pp. 122
Author(s):  
Sanesh. C ◽  
Greeshma. V
Keyword(s):  
Mutual Fund ◽  
Demographic Variables ◽  
The Other ◽  
Individual Investors ◽  
Psychological Processes ◽  
General Base ◽  
Corporate Securities ◽  
The Individual ◽  
Type Of Institution ◽  
Investment Choices

<div><p><em>A mutual fund is a special type of institution, a trust or an investment company which acts as an investment intermediary and invests the savings of large number of people to the corporate securities in such a way that investors get steady returns, capital appreciation and a low risk. This article focus on investors behaviour towards mutual fund schemes is done at a general base. . These expectations of investors are influenced by their perception and humans generally relate perception to action. Investor’s behaviour may change from period to period even if the other variables influencing the behaviour are held constant. The individual investors’ decision making often relies on observable socio-demographic variables to proxy for inherent psychological processes that drive investment choices.</em></p></div>

Individual investors' responses to mutual fund fire sales and sell-side analysts' price-correcting revisions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jinglin Jiang ◽  
Weiwei Wang
Keyword(s):  
Mutual Fund ◽  
Individual Investors ◽  
Earnings Forecast ◽  
Content Type ◽  
Forecast Revisions ◽  
Fire Sales ◽  
Informed Traders ◽  
Trading Decisions ◽  
Information Event ◽  
New Evidence

PurposeThis paper investigates individual investors' responses to stock underpricing and how their trading decisions are affected by analysts' forecasts and recommendations.Design/methodology/approachThis empirical study uses mutual fund fire sales as an exogenous source that causes stock underpricing and analysts' forecasts and recommendations as price-correcting information. The study further uses regression analysis to examine individual investors' responses to fire sales and how their responses vary with price-correcting information.FindingsThe authors first show that individual investors respond to mutual fund fire sales by significantly decreasing net buys, and this effect appears to be prolonged. Next, the authors find that the decrease of net buys diminishes following analysts' price-correcting earnings forecast revisions and stock recommendation changes. Hence, the authors suggest that individual investors are not “wise” enough to recognize flow-driven underpricing; however, this response is weakened by analysts' price-correcting information.Originality/valueThere is an ongoing debate in the literature about whether individual investors should be portrayed as unsophisticated traders or informed traders who can predict future returns. The authors study a unique information event and provide new evidence related to both perspectives. Overall, our evidence suggests that the “unsophisticated traders” perspective is predominant, whereas a better information environment significantly reduces individual investors' information disadvantage. This finding could be of interest to both academic researchers and regulators.

DETERMINANTS OF THE EXECUTION COSTS OF COMMON STOCK TRADES BY INDIVIDUAL INVESTORS

1986 ◽  
Vol 9 (4) ◽  
pp. 291-301 ◽  
Author(s):  
Gerald A. Blum ◽  
William A. Kracaw ◽  
Wilbur G. Lewellen
Keyword(s):  
Common Stock ◽  
Individual Investors ◽  
Execution Costs
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