Investor Profile Research Articles

An equity fund recommendation system by combing transfer learning and the utility function of the prospect theory

Investors in financial markets are often at a loss when facing a huge range of products. For financial institutions also, how to recommend products to the right investors, especially those without previous investment records is problematic. In this paper, we develop and apply a personalized recommendation system for the equity funds market, based on the idea of transfer learning. First, using modern portfolio theory, a profile of equity funds and investors is created. Then, the profile of investors in the stock market is applied to the fund market by the idea of transfer learning. Finally, a utility-based recommendation algorithm based on prospect theory is proposed and the performance of the method is verified by testing it on actual transaction data. This study provides a reference for financial institutions to recommend products and services to the long tail customers.

Behavioural Factors in the Hungarian Retail Government Bond Market

It has long been known that the decision-making of money market participants deviates from the pattern outlined by textbook models. This study attempts to explore the real processes taking the approach of behavioural finance, and analyses the hypothetical investment decisions of Hungarian retail government bond investors based on the literature of behavioural finance theses. The analysis relies on the results of a representative opinion poll using behavioural finance theory on the government bond market as a basis. The survey covers the political, emotional and literacy factors underlying the decisions. It examines the herding effect, the influence of demographic factors, and as a new approach, it outlines the profile of Hungarian retail investors. One other novel result of the survey is that it confirms a number of commonly known assumptions about the behaviour of retail investors through collecting data, while reviewing and synthesising behavioural finance literature specifically relevant to the government bond market.

Foreign and Domestic Investment in Global Bond Markets

Gauging foreign (domestic) biases as the deviation of foreign (domestic) investors’ actual portfolio allocation of a bond market from the same bond market’s weight in global bond market, we investigate the determinants of foreign and domestic investment biases in 41 global bond markets. We find that foreign investors significantly overweigh markets that offer better risk–return profiles. In addition, greater market openness and sound macroeconomic outlook attract foreign investment. Such return driven behavior of foreign investors is especially pronounced in emerging bond markets. Meanwhile, home bias is higher in smaller bond markets. Our evidence sheds some light on the role of regional financial integration on broadening investor base and improving investor profile in emerging markets.

The IRA Investor Profile: Traditional IRA Investors’ Activity, 2007–2016

The IRA Investor Profile: Traditional IRA Investors’ Activity, 2007–2016

Riscos e incertezas manifestos no valor econômico de um investimento: um estudo de caso da OGX Petróleo e Gás

No mercado financeiro e de capitais brasileiro, muitas são as opções de investimentos para os poupadores de recursos. Entretanto, a decisão por tais opções dependerá basicamente do perfil do investidor e do retorno esperado do ativo a que se queira investir. Tendo em vista a questão do retorno sob a forma de expectativa da geração de fluxos de caixa futuros, somados aos riscos diversos e à incerteza, tanto sob o aspecto macroeconômico quanto do próprio negócio da empresa investida, pode-se afirmar, de início, que a subjetividade utilizada na avaliação de um ativo ou um negócio seja um dos itens considerados na definição do seu valor econômico. Nesse sentido, o objetivo central deste artigo é analisar como o risco e a incerteza, aliados à formação das expectativas na avaliação de um investimento, se manifestam na formulação do seu valor econômico. A pesquisa documental deste trabalho foi focada na análise da empresa OGX Petróleo e Gás S.A. (OGX) compreendendo o período de 2008 a 2015. Alguns anos após a abertura de seu capital, foi constatado, pela OGX, que boa parte dos ativos anteriormente reconhecidos não apresentavam viabilidade na exploração de petróleo e gás natural, resultando no reconhecimento em seu resultado de perdas na forma de impairment, o que ocasionou a queda do valor de suas ações. Desse modo, com base nos resultados apresentados neste estudo, pode-se inferir que o risco e a incerteza, aliados a formação das expectativas, tiveram forte influência na avaliação do valor econômico da ação da OGX.

Portfolio rebalancing with respect to market psychology in a fuzzy environment: A case study in Tehran Stock Exchange

While a vast amount of literature shows that psychological factors are major pricing determinants, portfolio optimization models ignore the emotional aspects of financial markets. Accordingly, this paper presents a two-stage portfolio rebalancing method to integrate mean-variance theory with market psychology. At the first stage, the psychological state of market participants is translated into a set of criteria to evaluate stocks, and then, in a fuzzy environment, the process of ratiocination used by technical analysts is simulated to assess the status of these criteria and determine under- and overvaluation possibilities of stocks. At the second stage, a fuzzy programming approach utilizes the calculated possibilities to revise an existing portfolio considering investor profile, transaction costs, and risk-free rate of return. An empirical study using the obtained data from Tehran Stock Exchange is employed to validate the designed method and compare it against several other investment strategies, including Buy-and-Hold strategy and a conventional portfolio rebalancing model. The results show that the proposed fuzzy method responds appropriately to the psychological component of the market. In addition, for all investor profiles, the recommended strategy completely outperforms the market and the remaining strategies.

Stock Allocation in Turkish Capital Markets: Industry and Firm Level Perspectives

Investors’ trading patterns has been an intensively researched topic in emerging markets depending on their significant role and power in the capital markets. This paper provides what global and domestic factors have driven the stock allocation of investors in Turkey and how has the crisis changed investors’ attitude toward stock allocation between the years 2006 and 2016. Year-end stock allocation data are obtained from the Central Securities Depository Institution of Turkey. Stock allocation has been investigated mainly in terms of the domestic and foreign stock investments. A detailed classification of investors as individual and institutional investors in terms of investment funds, corporate and investment trusts with firm and industry levels has also been evaluated. The variations on stock allocation has been examined in BIST Industrials, Financials and Services Industries. Additionally, this paper gives an insight about the firm and industry level stock allocation in Turkish Capital Markets considering the responsible stockholders. Corporate governance practices are considered to be strengthened with the growing role of institutional investors in the financial system, which provide insights about the investor profile of BIST Corporate Governance Index in the related period.

Legislative policy environment as facilitator of foreign residential investment in Australia

Significant changes to Australian foreign investment policy were enacted in December 2015 affecting how foreigners can purchase property. Therefore, it is timely to examine the role of legislative policy in supporting and shaping foreign investment in residential real estate. This paper contributes to the body of knowledge about the scale, extent and nature of foreign investment in residential real estate in several ways. First, legislative analysis reveals an emphasis on boosting new dwelling supply and on economic stimulus. Second, comparing Australian and international policies we show that some countries channel foreign ownership away from land and towards buildings only. Third, examining the scale of foreign investment in residential real estate since 2009 we show that while the number of foreign approvals has been rising, their value remained static. Fourth, our research reveals a changing investor profile over time in Australia. Additionally, on the Gold Coast, as in other capital cities in Australia, there has been a sectoral change with an increase in foreign property developers supplying dwelling product. The paper concludes with some key research recommendations to aid in understanding supply and demand from foreign residential property investors and the influence this has on property markets.

Does Investors’ Demographics And Selected Profile Factors Influence Financial Risk Tolerance?

In this study, researcher attempted to study the association of the Demographic and Investor profile of investors with the one of the important psychological variable financial risk tolerance using chi square test. Further by using the correspondence analysis/crosstabs, researcher attempted to gain more insight in to the association. Finally the extent of influence of the Demographic and investor profile variables on the Financial risk tolerance cluster was studied using the canonical correlation. The research design followed in this study is the descriptive research design. Using the Multi stage random sampling technique, the primary data for the study was collected from 470 respondents (investors) in the State of Tamilnadu, India. The results of this study confirmed that there exists significant association between all the Demographic and Investor profile variables with the financial risk tolerance. Also the results further revealed that variables such as gender, age, marital status, type of family, dependents, religion, occupation, number of earning members and amount spent for recreation/entertainment exert significantly strong influence on the financial risk tolerance cluster.

The impact technical and non-technical investors have on the stock market: Evidence from the sentiment extracted from social networks

This research analyzes the differences between the activity shown by technical and non-technical investors by means of social media and its influence on measurement of market risk with the VIX index using a logit model. The results show that the activity of technical investors by means of social media has no effect on the risk perceived in the market. However, the sentiment of non-technical investors influences market risk, their experience, their holding period and their number of followers, reveal that investor profile is important when understanding how social networks influence stock market activity. Thus, we show that investor profile helps in understanding the influence of social networks over the stock market, and most importantly, this influence varies depending on the type of investor, either technical or non-technical.

MiFID Directive: Which Implementation within Belgian Financial Institutions

By relying on interviews with three financial institutions in Belgium, we determine how the MiFID directive has resulted in practice and how investors perceive these procedural changes. The results reveal some homogeneity between the three institutions both in determining the customer's risk, in the portfolio composition as in the appropriateness of the products sold to the investor's profile.

Opinion on the new financial products issued by financial institutions - structured products

Abstract Structured products are financial instruments issued by a financial institution where the amount claimed by the investor from the issuer depends on the variation of the price of the underlying instrument based on which the certificate is issued, namely: individual shares, share costs, stock indexes, currencies, commodities or combinations of these according to the prospectus. These products appeared with the development and diversification of financial services during the recent years, as well as due to the emergence of liquidity suppliers of international importance. The liquidity providers have developed on their own platforms a new range of derivatives which are different from the classical derivatives. These new derivatives, similar to contracts for difference (CFDs), have given to other institutions the possibility of transferring their risk more easily, regardless of the nature or type of the underlying asset. Thus, the financial institutions issuing structured financial products have found in liquidity providers the possibility of developing the CFDs required for their risk transfer operations. The issuers of structured products do not accept new risky positions when they issue certificates because they neutralize them through suitable risk transfer operations. The issuing financial institutions structure certificates from a variety of financial assets and/or commodities in order to adjust them to the various risk profiles of investors both in terms of expected return and in terms of the response to risk. Thus, products are issued that quickly respond to the trends of the financial or commodity markets. Investors in structured financial products benefit from the economic effect of a derivative but are exposed to financial risks that are more complex and more difficult to understand and at the same time depend on the reliability and stability of the contractual relationships between various financial institutions.

A Study of Risk Profiling and Investment Choices of Retail Investor

This research is an attempt to explore the association between various demographical factors, risk profile and investment decision of retail investors. All measures were tested for reliability through computation of Cronbach’s Alpha. The Alpha coefficient value was found 0.741 for variables like wealth, risk profile asset class, fixed return, mutual fund return, equity, real estate and gold commodity. Further, the chi-Square and crammer-v statistics has been used to interpreting the association between these factors. And it revealed that the investors do not always behave rationally and their choice of investments is decided by their risk profile and other demographical factors such as age, gender, income, wealth etc. This research is also useful for portfolio managers to construct the right portfolio for the investors according to their needs and preferences.

PERILAKU INVESTOR DI PASAR MODAL INDONESIA

The objective of this research is to classify thetype of individual investors in the Indonesia capital market. The purpose of classification is to provide an overview for securities firms about the profile of individual investors in the Indonesia capital market, this classification will also provide overview for individual investors on their investment habits, so they can encourage good trading habits and make the investor obtain good performance from the investment. From the profile, we provide guidelines to incorporate Behavioral Finance into asset allocation design which will better serve the investor’s best interest. The result shows that Indonesia individual investors tend to be irrational in investing, where they can be classified into two major groups: the first is the group confident big traders who have high confidence and high control, and the highest value of the portfolio. The second group which is loss averse group of small traders who have high confidence and high control, with a small value of portfolio.

Understanding the risk tolerance level and trading behaviour of individual investors with special reference to demographic profile of investors

Understanding the risk tolerance level and trading behaviour of individual investors with special reference to demographic profile of investors

To Study the Demographic Profile of Investors, their Attitude and Preferences towards various Investment Avenues in Stock Market

Investors are investing in stock market as number of investment avenues are available for them with different risk and return characterstics. Investors, acquire these securities from the stock market depending upon their requirement and needs in order to create and construct that portfolio where they are able to generate superior risk adjusted returns. Similarly, their preference for different types of stock varies according to their requirements. Moreover, investors with difference in their income, age, occupation, education and across other variables have preference for different avenues. The researcher has made attempt in the present study to define in detail demographic profile of the investors in the study area and then to study investors across different variable their preferences for different avenues. Moreover, different investors have different investment motives for investing in volatile market. Some wish to get higher returns, some invest because of liquidity, some for tax purpose etc. The researcher has attempted to study investment objectives of the investor and in order to achieve the objectives strategy used by the investors to achieve the desired results.

Investor Behavior in Crowdinvesting

Using hand collected and one of the most comprehensive datasets on one of Germany’s largest crowdinvesting portals, this paper analyzes the investment behavior of over 15,400 investors on the crowdinvesting platform Companisto. While outlining the profiles of investors based on over 42,900 investment decisions, it shows that paramount contributions come in the form of strategic investments. Further analysis reveals that investors categorized as strategic investors invest less frequently. Moreover, strategic investors are less likely to have invested in a venture that ultimately failed. This significantly furthers the comprehension of crowdinvesting by showing that the crowd is not a homogenous community, whilst also providing numerous revelations for policy makers, crowdinvesting platforms, as well as entrepreneurs.

Investigation of Variation between Risk Attitude and Investment Biases

There is a palpable link between financial investment decision making and investors’ behaviour. Research into investors’ behaviour may prove useful in increasing our understanding of the extremely complex financial marketplace. In many cases, investors are unaware of their predisposition for error. And more often, an irrational investor is a dissatisfied investor, because biases usually undermine financial goals. By adopting an experimental approach, the researchers try to correlate established investor biases with the psychographic profiles of investors, to see whether specific risk personality profiles correlate with susceptibility to four biases: herding, endowment, loss aversion and framing. Many studies have focused on exploring the demographics of investment behavioural flaws, but very little attention has been paid to the risk attitude of investors and their actual investment behaviour. The findings of this study bridge two aspects of literature, being attitude to financial risk and behavioural investment biases.

The IRA Investor Profile: Traditional IRA Investorss Activity, 2007-2014

Using data from year-end 2007 through year-end 2014, this report analyzes data on traditional IRA investors drawn from The IRA Investor Database to gain insight into how traditional IRA investors fared during and after the financial crisis. After setting the scene in terms of financial developments and regulatory changes affecting traditional IRAs, chapter 1 analyzes the contribution, rollover, and withdrawal activity among 4.9 million consistent traditional IRA investors (those with accounts at the end of each year from 2007 through 2014). In addition, this chapter explores changes in asset allocation and account balances among consistent traditional IRA investors. The remaining chapters of the report primarily focus on a snapshot of traditional IRA investors at year-end 2014. Chapter 2 discusses how contribution activity varied by investor age in 2014, exploring which traditional IRA investors had contributions and how many of them contributed at the limit. Chapter 3 notes that the vast majority of new traditional IRAs opened in 2014 were opened with rollovers, and examines rollover activity by investor age. Chapter 4 explores withdrawal activity, which varies significantly with investor age and in reaction to rules governing withdrawals. Few traditional IRA investors younger than 60 take withdrawals; traditional IRA investors taking withdrawals tend to be older and often take out the required minimum distribution (RMD) amount. Chapter 5 reports variation in traditional IRA balances by investor age. Chapter 6 compares snapshots of the asset allocation of traditional IRA balances among cross sections of traditional IRA investors at year-end 2007 and year-end 2014. Because some of the variation in asset allocation appears to be related to traditional IRA balance size, the asset allocation of balances of $5,000 or less are compared with the asset allocation of balances of more than $5,000. Smaller balances often have high allocations to money market funds or other cash instruments, which in part may reflect default investment rules for certain rollovers.

DE PEKÍN A MADRID: PERFILES DE INVERSORES CHINOS EN ESPAÑA

We study the profiles of Chinese investors in Spain. To this end, we rely on firm-level data and on primary data obtained through a questionnaire. We focus on projects in manufacturing, renewable energy and wholesale and retail trade. Chinese firms investing in manufacturing aim to acquire and develop new capabilities and to access not only the Spanish market but also other markets inside and outside the EU. Chinese investors in renewables are also export-oriented but, unlike firms in other sectors, they particularly appreciate the qualifications of Spanish workers. In wholesale, Chinese firms are more attracted by Spanish consumers: their main interests consist in acquiring new capabilities, making their brand known and supporting their exports to Spain. The present study might be useful for practitioners seeking to better understand the strategy, opportunities and risks of these new players in the Spanish market