Individual Investor Perceptions and Behavior During the Financial Crisis

Individual Investor Perceptions and Behavior During the fiscal Crisis Arvid O. I. Hoffmann* Maastricht University and Netspar Thomas Post Maastricht University and Netspar Joost M. E. Pennings Maastricht University, Wageningen University, and University of Illinois at UrbanaChampaign distinguished 8, 2012 Abstract: Combining monthly regard data with co-ordinated transaction records, we examine how individual investor perceptions change and labor trading and risk -taking demeanor during the 20082009 financial crisis. We find that investor perceptions quiver importantly during the crisis, with risk valuation account and risk perceptions being slight volatile than retrieve expectations. During the worst months of the crisis, investors return expectations and risk tolerance decrease, while their risk perceptions increase. Towards the abrogate of the crisis, investor perceptions recover. We document substantial swings in trading and risk -taking behavior that ar e driven by changes in investor perceptions. Overall, individual investors move to trade actively and did not de -risk their investment portfolios during the crisis.

JEL Classification: D14, D81, G01, G11, G24 Keywords: Financial Crisis, Individual Investors, Investor Perceptions, Trading Behavior, risk of exposure -Taking Behavior * Corresponding author: Arvid O. I. Hoffmann, Maastricht University, naturalise of Business and Economics, incision of Finance, P.O. Box 616, 6200 MD, The Netherlands. Tel.: +31 43 38 84 602. E -mail: a.hoffmann@maastrichtuniversity.nl. This research would not have been workable without the help of a large discoun! t brokerage firm. The authors convey this broker and its employees who helped us by answering numerous questions. For their comments, the authors thank secure Barber, Jaap Bos, benedict Dellaert, Daniel Dorn, Louis Eeckhoudt, Markus Glaser, Dan Goldstein, Robin Greenwood, Dries Heyman, Bertrand Melenberg, Christine Moorman, Terry Odean, Carrie Pan, Markus Schmid, Peter...If you want to get a mount essay, order it on our website: OrderCustomPaper.com

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