Afraid of the stock market

TitleAfraid of the stock market
Publication TypeJournal Article
Year of PublicationForthcoming
AuthorsLim, Y, Kim, KTae
JournalReview of Quantitative Finance and Accounting
ISSN Number0924-865X
KeywordsDecision making, Investing, Stocks
Abstract

This study demonstrates the way investors psychological traits influence their financial behaviors in the stock market. Results from the Health and Retirement Study show that anxious individuals are reluctant to participate in the stock market and have a lower level of risky investments. Anxiety’s effect is more pronounced for less educated investors, implying that anxiety about the unknown stock market drives this effect. Analysis of individual traumatic experiences as instruments for the current anxiety level suggests a causal effect of anxiety on investment decisions.

DOI10.1007/s11156-018-0766-x
Short TitleRev Quant Finan Acc
Citation Key9997