Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/22017
Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Stock market expectations and risk aversion of individual investors
Authors: Lee, Boram
Rosenthal, Leonard
Veld, Chris
Veld-Merkoulova, Yulia
Contact Email: boram.lee@stir.ac.uk
Keywords: Portfolio allocation
Stock market expectation
Risk aversion
Individual investor
Issue Date: Jul-2015
Publisher: Elsevier
Citation: Lee B, Rosenthal L, Veld C & Veld-Merkoulova Y (2015) Stock market expectations and risk aversion of individual investors, International Review of Financial Analysis, 40, pp. 122-131.
Abstract: We study the relationship between stock market return expectations and risk aversion of individuals and test whether the joint effects arising from the interaction of these two variables affect investment decisions. Using data from the Dutch National Bank Household Survey, we find that higher risk aversion is associated with lower stock market expectations. We identify significant and negative effects on the probability that individuals invest in stocks arising from the interaction between stock market expectations and risk aversion. These effects are in addition to a significant and positive impact from stock market return expectations as well as a significant and negative effect from risk aversion separately. However, once individuals participate in the stock market, their stock market expectations alone remain significant in determining their portfolio allocation decisions.
Type: Journal Article
URI: http://hdl.handle.net/1893/22017
DOI Link: http://dx.doi.org/10.1016/j.irfa.2015.05.011
Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.
Affiliation: Accounting and Finance
Bentley University
Monash University
Monash University

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