Short-term Investment Decisions Research Articles

One-way ticket to the moon? An NLP-based insight on the phenomenon of small-scale neo-broker trading

We present an Natural Language Processing based analysis on the phenomenon of “Meme Stocks”, which has emerged as a result of the proliferation of neo-brokers like Robinhood and the massive increase in the number of small-scale stock investors. Such investors often use specific Social Media channels to share short-term investment decisions and strategies, resulting in partial collusion and planning of investment decisions. The impact of online communities on the stock prices of affected companies has been considerable in the short term. This paper has two objectives. Firstly, we chronologically model the discourse on the most prominent platforms. Secondly, we examine the potential for using collaboratively made investment decisions as a means to assist in the selection of potential investments.. To understand the investment decision-making processes of small-scale investors, we analyze data from Social Media platforms like Reddit, Stocktwits and Seeking Alpha. Our methodology combines Sentiment Analysis and Topic Modelling. Sentiment Analysis is conducted using VADER and a fine-tuned BERT model. For Topic Modelling, we utilize LDA, NMF and the state-of-the-art BERTopic. We identify the topics and shapes of discussions over time and evaluate the potential for leveraging information of the decision-making process of investors for trading choices. We utilize Random Forest and Neural Network Models to show that latent information in discussions can be exploited for trend prediction of stocks affected by Social Network driven herd behavior. Our findings provide valuable insights into content and sentiment of discussions and are a vehicle to improve efficient trading decisions for stocks affected from short-term herd behavior.

Overview of the Nexus Between Investor Sentiment-return Relation and its Antecedents: A Systematic Literature Review

Investor sentiment is the irrational belief of investors leading to over and under-reaction of stock return. Though scholarly works are growing expeditiously in this domain, there is no consensus on the impact of investor sentiment on stock return in different markets. Given the paucity of literature in terms of a summary overview of the nexus between investor sentiment and stock return, this study aims to bridge this gap by re-examining investor sentiment’s impact on stock return in the global context. A total of 108 articles were retrieved from the Scopus database spanning from 2000 to 2022. To review the articles, the study employs Scientific Procedure and Rationales for Systematic Literature Review (SPAR-4-SLR) approach. The review reveals that there exists a significant positive effect during the short run. Furthermore, trading volume, social media, initial public offerings, consumer confidence, and closed-end fund discount are found to be the most frequently used proxies for investor sentiment. The review suggests investors to exercise caution while making short-term investment decisions due to strong sentiment-return relations in the short run. The study findings help policymakers and regulators to play a vital role during abnormal market conditions such as market crashes, financial crises and pandemic situations.

Role of perceived COVID-19 disruption, personality traits and risk perception in determining the investment behavior of retail investors: a hybrid regression-neural network approach

PurposeThis study aims to assess the impact of personality traits, risk perception and perceived coronavirus disease 2019 (COVID-19) disruption on the investment behavior of individual investors in the Indian stock market.Design/methodology/approachThis study adopts a survey approach. The sample comprises 315 active retail investors investing in the Indian stock exchange. Two-stage analysis technique regression and Artificial Neural Network (ANN) were used for data analysis. Study hypotheses were tested through regression and ANN was adopted to validate the regression results.FindingsTwo regression models were modeled to test the research hypotheses. Findings showed that risk perception and COVID-19 disruption have a significant positive and neuroticism has a significant negative impact on short-term investment decisions, while the role of conscientiousness in determining short-term investment decisions was not found significant. Results also showed a positive impact of neuroticism and conscientiousness and a negative impact of risk perception on long-term investment decisions. The role of COVID-19 disruption was found negative but insignificant in predicting long-term investment decisions.Practical implicationsThis study has practical implications for many parties like retail investors, financial advisors and policymakers. This study will assist the investors to realize that they do not always take rational financial decisions. This study will suggest the financial advisors to use the knowledge of behavioral finance in making the advisors' advisory and wealth management decisions. This study will also assist the policymakers to outline behaviorally well-informed policy decisions to protect the interests of investors.Originality/valueIndia is one of the fast-growing economies in the world. India has a vast population of active investors and determining investors' investment behavior adds novelty to this study as developed economies have remained the main focus of previous studies. The other novel feature of this study is that this study tries to assess the impact of COVID-19 disruption along with personality traits and risk perception on investment behavior. The other valuable factor of this study is the use of ANN to predict the relative importance of the exogenous variables.

A Tree Augmented Naïve Bayes-based methodology for classifying cryptocurrency trends

As the popularity of blockchain technology and investor confidence in Bitcoin (BTC) increased in recent years, many individuals started making BTC and other cryptocurrency investments, in expectation of high returns. However, as recent market movements have shown, the lack of regulation and oversight makes it difficult to guard against high volatility and potentially significant losses in this sector. In this study, we propose a data-driven Tree Augmented Naïve (TAN) Bayes methodology that can be used for identifying the most important factors (as well as their conditional, interdependent relationships) influencing BTC price movements. As the model is parsimonious without sacrificing accuracy, sensitivity, and specificity—as evident from the average accuracy value—the proposed methodology can be used in practice for making short-term investment decisions.

Do daily price extremes influence short-term investment decisions? Evidence from the Indian equity market

For short-term investments in equity markets, investors use price points, candlestick patterns, moving averages, support and resistance levels, trendlines, price patterns, relative strength index, and moving average convergence-divergence as reference(s) for making decisions. This study investigates whether investors use daily price extremes (highest and lowest prices for the day) for making short-term investments or trading decisions in the context of the Indian equity market. Using 6,902 observations of daily data of the NIFTY 50 index since its launch, it is observed that daily price extremes (high or low) have no impact on opening returns of the next trading day. Based on the dummy regression analysis, next-day opening returns were found to be statistically significant, which implies the presence of momentum behavior. However, insignificant coefficients for high or low-price extremes of the day mean that investors do not use them as an anchor or reference point for decisions. Results are consistent over time and robust to the rising or falling markets. Further, opening returns were seen to be more volatile than closing returns in the first half of the sample, and they are less volatile in the second half, implying that markets have become more efficient in the last few years.

Investors’ financial aspirations excite investment decisions: current income, future inheritance expectations, and short-term and long-term decisions—The Matthew Effect in Pakistan’s emerging markets

PurposeFollowing behavioral finance and monetary wisdom, the authors theorize: Decision-makers (investors) adopt deep-rooted personal values (the love-of-money attitudes/avaricious financial aspirations) as a lens to frame critical concerns (short-term and long-term investment decisions) in the immediate-proximal (current income) and distal-omnibus (future inheritance) contexts to maximize expected utility and ultimate serenity across context, people and time.Design/methodology/approachThe authors collected data from 277 active equity traders (professional money managers and individual investors) in Pakistan’s two most robust investment hubs—Karachi and Lahore. The authors measured their love-of-money attitude (avaricious monetary aspirations), short-term and long-term investment decisions and demographic variables and collected data during Pakistan's bear markets (Pakistan Stock Exchange, PSX-100).FindingsInvestors’ love of money relates to short-term and long-term decisions. However, these relationships are significant for money managers but non-significant for individual investors. Further, investors’ current income moderates this relationship for short-term investment decisions but not long-term decisions. The intensity of the aspirations-to-short-term investment relationship is much higher for investors with low-income levels than those with average and high-income levels. Future inheritance moderates the relationships between aspirations and short-term and long-term decisions. Regardless of their love-of-money orientations, investors with future inheritance have higher magnitudes of short-term and long-term investments than those without future inheritance. The intensity of the aspirations-to-investments relationship is more potent for investors without future inheritance than those with inheritance. Investors with low avaricious monetary aspirations and without inheritance expectations show the lowest short-term and long-term investment decisions. Investors' current income and future inheritance moderate the relationships between their love of money attitude and short-term and long-term decisions differently in Pakistan's bear markets.Practical implicationsThe authors help investors make financial decisions and help financial institutions, asset management companies, brokerage houses and investment banks identify marketing strategies and investor segmentation and provide individualized services.Originality/valueProfessional money managers have a stronger short-term orientation than individual investors. Lack of wealth (current income and future inheritance) motivates greedy investors to take more risks and become more vulnerable than non-greedy ones—investors’ financial resources and wealth matter. The Matthew Effect in investment decisions exists in Pakistan’s emerging economy.

Environment and Potential Affecting Investment Decision for Accommodation Business: Case of Less Visited Area in Samut Songkhram and Phatthalung Province

Investment decisions have great importance in different sectors of various countries and these decisions are the basis on which the outcomes of the investments are based. However, there might be certain factors that might lead to the incorrect long term and short term investment decisions. In this regard, the current study has been conducted with the core motive to explore the impact casted by the environment and potential factors i.e. salience and overconfidence on the long term investment decisions for accommodation business along with the moderation of a variable i.e. financial literacy. To fulfill this objective, the researcher has collected data from the investors of accommodation businesses in Thailand. The collected data has been subjected to different statistical techniques and tools for analysis purpose and the results have been obtained. The results obtained by the analysis of the collected data indicate that salience and overconfidence have significant impact on the long term investment decision. In addition, the moderating role of financial literacy has also been found as significant in the study. The results suggest that the investors of the accommodation business must consider the aspects of salience and overconfidence before taking any long term investment decision to avoid failure of the investment decision.

Concluding Observations

Concluding Observations David Begg I propose to offer some observations on the themes raised in the other papers, based on my own experience as a labour market practitioner over many years. Christian ethics has never been an abstract concept in industrial relations in Ireland. The establishment of the Irish Transport and General Workers’ Union in 1909 was a seminal moment. Up to then, trade unionism was mainly associated with the skilled trades. James Larkin sought to organise the labouring people into one big union (OBU). He came, he said, to bring ‘a divine gospel of discontent’. This approach was seen by the employers as a threat to their hegemony and Ireland saw considerable activism in pursuit of better wages and conditions, culminating in the 1913 Lockout. This dispute was forced on Larkin by the employers of Dublin, united under the leadership of William Martin Murphy. It continued for three months, causing great human suffering and eventually forcing the strikers back to work. Jim Larkin was a great orator prone to using scriptural references. In one speech he admonished the employers that they would ‘crucify Christ no longer in this town’. The irony of the 1913 Lockout is that the two main protagonists, Murphy and Larkin, were both staunch Catholics. Coming as it did, less than a quarter of a century after the promulgation of Rerum novarum by Pope Leo XIII, one might have expected this teaching to have had some influence on the parties to such a bitter dispute, but apparently it did not. Ireland, of course, has changed a great deal over the century since these events happened. One would not expect to find much reference to Christian ethics in what is now a secular society. But two recent events demonstrate that Christian ethics have a contemporary relevance in industrial matters. I am referring to the recent closure of the Wright bus factory in Ballymena, where laid-off workers protested that the €15 million gifted by the company to an Evangelical church had undermined the viability of the business. The second case I have in mind is a homily delivered by Fr Ollie O’Reilly, parish priest of Ballyconnell, Co. Cavan, in late September, in which he denounced attacks on executives of Quinn Industrial Holdings as being contrary to the Studies • volume 108 • number 432 469 Concluding Observations Gospel. He warned that, apart from being grievously wrong in themselves, these attacks, if they achieved their purpose, could also cost eight hundred families their livelihood. Catholic Social Teaching has exhibited an impressive consistency over the years from Rerum novarum to Laudato si’. It clearly informed the post-war consensus in which social democracy and Christian democracy dominated politics and Keynesian economics held sway.This was disrupted by the two oil crises of the 1970s, which caused ‘stagflation’and undermined Keynesianism. Into the gap stepped Milton Friedman, whose 1970 paper argued that the only social responsibility of business was to make profits. Thus began the neoliberal era in which executive pay is linked to share price, unions have been reduced in influence, and inequality and individualism now characterise the modern economy. Shareholder primacy alone dictated investment decisions and greed became respectable. Sadly, there is an irony here in that pension funds invested on behalf of workers are often the most demanding of shortterm investment decisions aimed at achieving high returns. Friedrich von Hayek was another ideologue similar to Friedman, who said he would like to see the phrase ‘social justice’ expunged from the English language. He complained bitterly that the Church had made social justice the core value of Catholic Social Teaching. In any event, scandals – Mirror Group, Poly Peck International, Enron etc. – caused the London Stock Exchange to realise the limitations of the greed is good philosophy. Sir Adrian Cadbury was commissioned to devise corporate governance rules to keep malfeasance in check. His 1992 report was the beginning of a corpus of corporate governance codes culminating in the G2O/OECD code in 2015. But these initiatives, though necessary, were not sufficient, as evidenced by the 2008 banking crisis and more recent scandals relating to vehicle emissions. In truth, economics has become detached from ethics. The problems associated with the doctrine...

Determinants of Individual Short-Term Investment Decisions: The Moderating Effect of Investors' Personal Quality in Nairobi Securities Exchange

Determinants of Individual Short-Term Investment Decisions: The Moderating Effect of Investors' Personal Quality in Nairobi Securities Exchange

Using fuzzy c-means clustering algorithm in financial health scoring

Classification of firms according to their financial health is currently one of the major problems in the literature. To our knowledge, as a first attempt, we suggest using fuzzy c-means clustering algorithm to produce single and sensitive financial health scores especially for shortterm investment decisions by using recently announced accounting numbers. Accordingly, we show the calculation of fuzzy financial health scores step by step by benefit from Piotroski’s criteria of liquidity/solvency, operating efficiency and profitability for the firms taken as a sample. The results of correlation analysis indicate that calculated scores are coherent with short-term price formations in terms of investors’ behavior and so fuzzy c-means clustering algorithm could be used to sort firm in a more sensitive perspective.

Market reactions to dividends announcements and payouts. Empirical evidence from the Warsaw Stock Exchange

The main goal of this paper is the empirical examination of the Polish stock market reactions to dividend announcements and dividend payouts made by the companies listed on the Warsaw Stock Exchange (WSE). The research sample comprises 56 companies (WIG index constituents) that announced dividend payments and completed the payout during 2013. In the analysis, event study methodology is employed including either calculating abnormal returns and cumulative abnormal returns around the event day or testing their statistical significance using parametric and nonparametric tests. The average cross-sectional abnormal return calculated for the entire sample is found to be significant on the dividend announcement day (t = 0, 0.86%) and on one day after (t = 1, 0.59%) at the 1% and 10% significance levels, respectively. The outcomes of the analysis conducted within the three distinguished subsamples are rather more diverse. In the subgroup of the first announced dividends (or dividends announced after a minimum one-year break), the significant average abnormal return is found on day t = 1 (0.90%, 5% significance level), whereas in the case of the dividend decreases subsample, the significant average abnormal returns (at the 10% significance level) occur on days t = −4 (-1.44%) and t = 2 (-1.15%). The average abnormal return calculated within the subsample of dividend increases turns out to be positive and significant on day t = 1 (1.03%, 10% significance level). The results obtained for the average cumulative abnormal returns corroborate the findings reached for the average cross-sectional abnormal returns in the case of the first dividend and dividend increase subsamples. However, the average cross-sectional abnormal returns calculated within the eleven-day-long event window around the dividend payment day turn out to be statistically insignificant. The obtained results provide evidence that the Polish stock market reaction to dividend announcements is positive and immediate. However, the market does not significantly react to dividend payouts, which may lead to the conclusion that the WSE directly incorporates news on dividends into stock prices. Moreover, the reaction of the market for dividend announcements is consistent with the sign of the dividend change: dividend-increase (-decrease) announcements are interpreted as a positive (negative) signal by the investors. Such results support both the informational content of the dividend hypothesis and the dividend signaling hypothesis. Considering that the observed abnormal market behavior disappears within two days at most after the announcement date, the results of the study can be useful for financial practitioners only with regard to short-term investment decisions.

Short-Term Decisions in the Field of Corporate Finance for Example, Company X in the Industry: Postal and Courier Activities

The presented report is to show the basic assumptions in the short-term investment decisions in the company. These decisions lead to an increase in capital and enrichment owners. It has been prepared on the example of the market-dominant companies from the courier.

High-order fuzzy time-series based on multi-period adaptation model for forecasting stock markets

Stock investors usually make their short-term investment decisions according to recent stock information such as the late market news, technical analysis reports, and price fluctuations. To reflect these short-term factors which impact stock price, this paper proposes a comprehensive fuzzy time-series, which factors linear relationships between recent periods of stock prices and fuzzy logical relationships (nonlinear relationships) mined from time-series into forecasting processes. In empirical analysis, the TAIEX (Taiwan Stock Exchange Capitalization Weighted Stock Index) and HSI (Heng Seng Index) are employed as experimental datasets, and four recent fuzzy time-series models, Chen’s (1996), Yu’s (2005), Cheng’s (2006) and Chen’s (2007), are used as comparison models. Besides, to compare with conventional statistic method, the method of least squares is utilized to estimate the auto-regressive models of the testing periods within the databases. From analysis results, the performance comparisons indicate that the multi-period adaptation model, proposed in this paper, can effectively improve the forecasting performance of conventional fuzzy time-series models which only factor fuzzy logical relationships in forecasting processes. From the empirical study, the traditional statistic method and the proposed model both reveal that stock price patterns in the Taiwan stock and Hong Kong stock markets are short-term.