Abstract

Both investor sentiment and investor expectation have important effect on investor decision and actions. By analyzing the related theories, we find that investor expectation is a cognitive process to financial market, while investor sentiment is a kind of external reflection or expression to irrational or bound rational investor expectation, and it exits interrelationship between them. Individual investor sentiment and collective investor sentiment interact through the contagion mechanism, Individual investor expectation interacts with collective investor expectations by communications. Between the collective investor sentiment and collective investor expectations have the same relationship like that.

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