Annotated Bibliography
Parmitasari, R. D. A., Hamsah, D., Alam, S., & Laba, A. R. (2018). Analysis of Ethics and Investor Behavior and Its Impact on Financial Satisfaction of Capital Market Investors. Scienctific Research Journal (SCIRJ), 4.
This particular study is aimed at showing that the investment ethics leaves impact on the financial satisfaction and it also lives impact on the behavior of the investor. The satisfaction is a significant measure of the desired level of the happiness. The desired financial level achievement for achieving the happiness of life for the individual is actually symbolized by the financial satisfaction. The behaviors that are undertaken by the individual can become Trigger for the satisfaction improvement. The investment and the ethics are beneficial relationships mutually. The investment decision-making through the investor will become ethically measured. Founded on that this research has been aimed at analyzing the influence of the investment ethics on the capital market investor behavior and the influence on the capital market investor satisfaction of finance. The study has helped in indicating that the investment ethics leaves impact on the financial satisfaction along with the behavior of investors as intervening. This study has proved that investment ethics impact on the financial satisfaction by the investor behavior. The findings are based on the context of the capital market investors and the respondents have indicated the existence of the ethical investment by the individuals and investors will be behaving according to that. The ethics will further lead the individuals to be behaving according to it and individuals will actually have the satisfaction for behaving in harmony with the ethics.
Gödker, K., & Mertins, L. (2018). CSR disclosure and investor behavior: A proposed framework and research agenda. Behavioral Research in Accounting, 30(2), 37-53.
This particular article has synthesized the behavioral research on the way and increasingly significant step of the corporate disclosure such as the corporate social responsibility disclosure leave impact on the investor’s behavior. Having structured the extent accounting along with the finance literature the authors of this article derive a holistic framework which actually consolidates the observed drivers of the information of the investors resulting and processing the investment decision making during confronting with the CSR disclosure. The authors have also identified both the disclosure and the individual investor characteristics which help in determining the investor behavior response was disclosing the CSR related data. The way the participants respond towards a corporate disclosure forms the significant cornerstone in many such areas of accounting and the finance research also. Having drawn on the proposed framework the authors of this article have pinpointed knowledge gaps in the literature along with providing the guidelines for the future research. There are fundamental issues for the future work consisting of the decoupling of particular variable drivers by the innovative measurement and the reliable recognition of the casual effects with the incorporation of the social interactions of the investors.
da Costa Neto, A. F., Klotzle, M. C., & Pinto, A. C. F. (2019). Investor behavior in ETF markets: a comparative study between the US and emerging markets. International Journal of Emerging Markets.
The next article has been aimed at presenting the outcomes of a study on the investor behavior in the markets based on exchange traded fund. The findings of the study shows that there is strong evidence of the feedback trading in all of the emerging markets as Korea, Brazil, India, Mexico. There is no such evidence for the market of the United States. The outcomes are quite consistent with the perspective that the developed market investors are prone to earth person the fundamental driven strategies of investment whereas the emerging market investors usually appear of having the behavior that is guided by information. The emerging markets still is found to be making up a small part of the international ETF market led by the United States of America. It is also highly significant that the studies of this type become expanded gradually with the growth of these markets for verifying the way the emerging markets as compared to the counter parts that are developed regarding the efficiency of the information with rationalizing and sharing the operations.
Cherono, I., Olweny, T., & Nasieku, T. (2019). Investor Behavior Biases and Stock Market Reaction in Kenya. Journal of Applied Finance and Banking, 9(1), 147-180.
There are many behavioral models developed for explaining the price momentum and the reversal in returns as the continuation which is followed by the reversal in the returns for reflecting the dynamic interaction between the momentum traders and news watchers predicted by the behavioral models. The investors have become more sensitive towards the reduction in the financial wealth than the increase which is also known to be the loss aversion. After the primary gains, the investor actually becomes less loss averse due to the primary gains which will support any of the subsequent loss incurred by an investor after encouraging the gains.
Paramita, R. S., Isbanah, Y., Kusumaningrum, T. M., Musdholifah, M., & Hartono, U. (2018). Young Investor Behavior: Implementation Theory of Planned Behavior. International Journal of Civil Engineering and Technology, 9(7), 733-746.
This study has been aimed at examining the behavior of the young investor in terms of investing in the stock. The analysis of the investor behavior has been done through using the theory of planned behavior that includes the subjective norms that use and the percent behavioral control and it is used as the independent variable. The study further makes use of the primary data and the data collection is done having used the questionnaires. The outcomes of the study shows the subjective norms the attitudes and the behavioral controls having no such impact on the interest during the interest influencing on the investment behavior.
References
Cherono, I., Olweny, T., & Nasieku, T. (2019). Investor Behavior Biases and Stock Market Reaction in Kenya. Journal of Applied Finance and Banking, 9(1), 147-180.
da Costa Neto, A. F., Klotzle, M. C., & Pinto, A. C. F. (2019). Investor behavior in ETF markets: a comparative study between the US and emerging markets. International Journal of Emerging Markets.
Gödker, K., & Mertins, L. (2018). CSR disclosure and investor behavior: A proposed framework and research agenda. Behavioral Research in Accounting, 30(2), 37-53.
Paramita, R. S., Isbanah, Y., Kusumaningrum, T. M., Musdholifah, M., & Hartono, U. (2018). Young Investor Behavior: Implementation Theory of Planned Behavior. International Journal of Civil Engineering and Technology, 9(7), 733-746.
Parmitasari, R. D. A., Hamsah, D., Alam, S., & Laba, A. R. (2018). Analysis of Ethics and Investor Behavior and Its Impact on Financial Satisfaction of Capital Market Investors. Scienctific Research Journal (SCIRJ), 4.
Summery
The economic theory is found to be founded on the belief that people usually behave in the rational manner and all of the existing information is actually embedded in the process of investment. However, there are researchers questioning that this assumption have uncovered the evidence that the rational behavior is not prevalent always as believed by people. The behavioral finance for the atoms for understanding and explaining the way human emotions live impact on the investors in their entire process of decision making (Paramita et al., 2018). Humans usually have the tendency of placing particular events into the mental compartments and the specific difference between those compartments of an impact on the behavior more than the events. An example of investing of the mental accounting is illustrated best through the recitation of selling an investment which had once the monstrous gain but has now a modest game. During the economic boom and also the Bull market people usually get a custom to the healthy games.
On the other hand, when the market correction the flats the net worth of the investors they are more hesitant of selling at the smaller margins of profit. It further creates the mental compartments for all of the gains which they had once having cause them waiting for the return of that entire period. People usually are found to be referring sure investment return more than the uncertain one and people also want to get paid for taking any risk (Gödker & Mertins, 2018).. This is quite reasonable. The prospect theory in this regard suggests that people usually express different degree of the emotion towards the gains then they expressed what the losses. The individuals are found to be more stressed by the losses than the equal games. The prospect theory further explains the reason behind investors holding onto the losing stocks. People usually take more for avoiding the losses than to realize the gains. This is the reason for which investors stay willingly in a risk stock position hoping that the price will bounce back. The gamblers on a losing streak will also behave in the similar fashion having double up the back in the bed for recouping what has been lost.
The loss aversion theory on the other hand specifies and other reason behind investor choosing for holding the losers and sealing the winners. Sometimes, the investors make the mistake of chasing the market action through investing in the stocks are the funds that can garner the maximum attention. Research has further shown that the money flows into the high performance mutual funds faster than the funds which are underperforming (Cherono, Olweny & Nasieku, 2019). Investors are further found to be assuming that the market price is actually the correct price and people have the tendency of placing much residents in the recent views of the market the events the opinions and also extrapolate mistakenly the recent trends which actually differ from the long-term historical averages and the probabilities. The decisions of investment in the bull markets are influenced often by the price and it is significant due to the closest to the latest prices.
It helps in making the distant returns of the past quite irrelevant in the decisions of the investors. The investors sometimes become optimistic during the market price and assume that it will consistently happen (Parmitasari et al., 2018).. They become highly pessimistic during the downturn and as a consequence of anchoring for placing high importance on the recent events during ignoring the historical data is the over on the under reflection to the market events. This comes out in the price falling maximum and rising maximum also (da Costa Neto, Klotzle & Pinto, 2019). Sometimes, the market crashes due to extreme cases of the over or the under reaction towards the market events. People usually read themselves to be above average in all of the abilities. They are also found to be overestimating the precision of the knowledge and the knowledge that is relative to other people. There are many investors who believe that they can turn the market consistently but in the reality there is the overwhelming amount of evidence which shows the other sides.
Hence, it can be said that the behavioral finance theories conflict directly with the traditional finance academics. Also, each of the camp attempts in explaining the behavior of the investors along with the implication of the behavior. The theory that maximum people oppose the behavioral finance is the efficient hypothesis of market. In this way, there may not be sufficient evidence for suggesting the market efficiency should become abundant because of the empirical evidence showing that market usually tend to correct themselves over a period of time. The behavioral finance definitely reflects few of the attitudes that are embedded in the investment system. On the other hand the behaviorists will be arguing that the investors behavior is rational sometimes having produced the inefficient market and the mispriced securities.
References
Cherono, I., Olweny, T., & Nasieku, T. (2019). Investor Behavior Biases and Stock Market Reaction in Kenya. Journal of Applied Finance and Banking, 9(1), 147-180.
da Costa Neto, A. F., Klotzle, M. C., & Pinto, A. C. F. (2019). Investor behavior in ETF markets: a comparative study between the US and emerging markets. International Journal of Emerging Markets.
Gödker, K., & Mertins, L. (2018). CSR disclosure and investor behavior: A proposed framework and research agenda. Behavioral Research in Accounting, 30(2), 37-53.
Paramita, R. S., Isbanah, Y., Kusumaningrum, T. M., Musdholifah, M., & Hartono, U. (2018). Young Investor Behavior: Implementation Theory of Planned Behavior. International Journal of Civil Engineering and Technology, 9(7), 733-746.
Parmitasari, R. D. A., Hamsah, D., Alam, S., & Laba, A. R. (2018). Analysis of Ethics and Investor Behavior and Its Impact on Financial Satisfaction of Capital Market Investors. Scienctific Research Journal (SCIRJ), 4.
