TY - JOUR
T1 - Individual investor perceptions and behavior during the financial crisis
AU - Hoffmann, A.O.I.
AU - Post, T.
AU - Pennings, J.M.E.
PY - 2013/1/1
Y1 - 2013/1/1
N2 - Combining monthly survey data with matching trading records, we examine how individual investor perceptions change and drive trading and risk-taking behavior during the 2008-2009 financial crisis. We find that investor perceptions fluctuate significantly during the crisis, with risk tolerance and risk perceptions being less volatile than return expectations. During the worst months of the crisis, investors' return expectations and risk tolerance decrease, while their risk perceptions increase. Towards the end of the crisis, investor perceptions recover. We document substantial swings in trading and risk-taking behavior that are driven by changes in investor perceptions. Overall, individual investors continue to trade actively and do not de-risk their investment portfolios during the crisis. (C) 2012 Elsevier B.V. All rights reserved.
AB - Combining monthly survey data with matching trading records, we examine how individual investor perceptions change and drive trading and risk-taking behavior during the 2008-2009 financial crisis. We find that investor perceptions fluctuate significantly during the crisis, with risk tolerance and risk perceptions being less volatile than return expectations. During the worst months of the crisis, investors' return expectations and risk tolerance decrease, while their risk perceptions increase. Towards the end of the crisis, investor perceptions recover. We document substantial swings in trading and risk-taking behavior that are driven by changes in investor perceptions. Overall, individual investors continue to trade actively and do not de-risk their investment portfolios during the crisis. (C) 2012 Elsevier B.V. All rights reserved.
U2 - 10.1016/j.jbankfin.2012.08.007
DO - 10.1016/j.jbankfin.2012.08.007
M3 - Article
SN - 0378-4266
VL - 37
SP - 60
EP - 74
JO - Journal of Banking & Finance
JF - Journal of Banking & Finance
IS - 1
ER -