Financial overconfidence over time: Foresight, hindsight, and insight of investors

    Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avisTidsskriftartikelForskningpeer review

    82 Citationer (Scopus)

    Abstract

    Financial overconfidence leads to increased trading activity, higher risk taking, and less diversification. In a panel survey of online brokerage clients in the UK, we ask for stock market and portfolio expectations and derive several overconfidence measures from the responses. Overconfidence is identified in the sample in various forms. By matching survey data with participants’ transactions and portfolio holdings, we find an influence of overplacement on trading activity, of overprecision and overestimation on diversification, and of overprecision and overplacement on risk taking. We explore the evolution of overconfidence over time and identify a role of past success and hindsight on subsequent investor overconfidence in line with learning to be overconfident.

    OriginalsprogEngelsk
    TidsskriftJournal of Banking and Finance
    Vol/bind84
    Sider (fra-til)68-87
    Antal sider20
    ISSN0378-4266
    DOI
    StatusUdgivet - 1 nov. 2017

    Fingeraftryk

    Dyk ned i forskningsemnerne om 'Financial overconfidence over time: Foresight, hindsight, and insight of investors'. Sammen danner de et unikt fingeraftryk.

    Citationsformater