فعالیت های تجاری سرمایه گذاران: دیدگاه رفتاری و نتایج تجربی

This study attempts to group investors (individuals and professionals) into different segments based on their psychological biases and personality traits and, then, to examine whether, and how, these biases and traits drive their investment behaviour. The behavioural finance literature suggests four main factors that influence investment behaviour: overconfidence, risk tolerance, self-monitoring and social influence. Adopting this approach, a cluster analysis of data from a representative survey of 345 investors in Greece identified three main segments of investors: high profile investors (a high degree of overconfidence, risk tolerance, self-monitoring and social influence), moderate profile investors (a moderate level of overconfidence, risk tolerance, self-monitoring and social influence) and low profile investors (a low degree of overconfidence, risk tolerance, self-monitoring and social influence). The major finding of the analysis shows that the higher the investors’ profile, the higher the performance of these investors on stock trading. The results will expand investors’ knowledge about the financial decision-making process and trading behaviour.

Traditional finance theories such as Efficient Market Theory (Fama, 1965a and Fama, 1965b) and Modern Portfolio Theory (Markowitz, 1952) support the hypotheses of rational investors and efficient markets. However, it is obvious that there are irrational investors in the market, making random transactions that cannot adequately be explained by traditional finance theories (Chang, 2008). Many scholars, such as Kahneman and Tversky (1979), believe that the study of psychology and other social science theories can shed considerable light on the efficiency of financial markets, as well as explain many stock market anomalies, market bubbles and crashes. Thus, a relatively new theory, called behavioural finance, has emerged in an attempt to understand the human psychological biases that are related to the financial markets. In contrast to traditional finance, which examines how people should behave in order to maximize their wealth, behavioural finance investigates how people actually behave in a financial setting (Nofsinger, 2005a). The behavioural finance literature has developed a number of behavioural concepts that explain investment behaviour. This paper reviews some of the most significant and reliably measurable concepts to classify investors into profiles and, then, to compare their personal characteristics and their trading behaviour. The behavioural characteristics (concepts) that have been selected for classifying investors into profiles are: overconfidence (OV), risk tolerance (RT), self-monitoring (SM) and social influence (SI). Thus, this paper examines whether the different psychological and personal characteristics lead to differences in investment behaviour and trading performance among the group of investors with different profiles. This framework will, hopefully, help investors understand how biases and traits affect their investment decisions. The paper is organized as follows: first, the paper discusses selected psychological biases and personality traits that are involved in behavioural finance. Then, a brief description of the methodology design is presented and finally the results of the cluster analysis are presented.

Based on the evidence provided by the literature it becomes apparent that investors’ stock trading behaviour (including stock performance, stock volume and stock frequency) is affected by personality traits and psychological biases (overconfidence, risk tolerance, self-monitoring, social influence). However, it should be stressed that each of these psychological biases affect in a different way each of the three dimensions of trading behaviour examined in this study. For example, although, overconfidence positively affects stock trading volume (Dow and Gorton, 1997, Glaser and Weber, 2007 and Deaves et al., 2003), as well as stock trading frequency (Alemanni and Franzosi, 2006, Grinblatt and Keloharju, 2009 and Glaser and Weber, 2007), the evidences about its relation with stock performance are both positive (De Long et al., 1990 and Wang, 2001) as well as negative (Barber and Odean, 2001a, Benos, 1998, Daniel et al., 1998, Odean, 1998 and Philip, 2007). The main concern, therefore, is that one should look at the relationships between trading behaviour dimensions and the various psychological biases at an one-to-one basis in order to be able to come up with a meaningful conclusion concerning the overall effect at these biases on trading behaviour. In this study, cluster analysis identified three investor profiles, the low, moderate and high investor profiles, with each one of them exhibiting different trading behaviour. The results of the analysis show that the higher the investors’ profile, the higher the performance of these investors on stock trading. Unfortunately, one may assume that the characteristics of high profile investors lead to a winning strategy in stock markets. In this research, high profile investors are those scoring high levels on the psychological biases and personality traits examined. Specifically, they are overconfident and risk-tolerant investors with, also, a high degree of social influence and self-monitoring, who have better performance than investors from other profiles. Thus, these investors own high-value portfolios, trade high volumes of stocks and make transactions more frequently compared with investors from the other profiles. Therefore, high trading frequency and high stock volume do not negatively affect investment performance but may lead, under specific conditions, to a better performance. Also, high risk taking and high overconfidence seem to influence stock returns positively (high profile investors’ results). Furthermore, high profile investors, among other sources of investment information, emphasise the information provided by fundamental and technical analyses and, generally, financial statements. Some other characteristics of investors in this profile are the target price investment policy they adopt and their large investment experience. High profile investors’ trading behaviour may be explained by the large proportion of professional investors (Shapira and Venezia, 2001 and Sharma, 2006) who are included in this group, but also by their high degree of overconfidence, risk tolerance and self-monitoring (Wang, 2001, Biais et al., 2005, Dorn and Huberman, 2005, Durand et al., 2008 and Grinblatt and Keloharju, 2009). On the other hand, low profile investors underperform in stock markets, trade rarely and their major characteristics, compared with the investors in other groups, are their low scores on psychological biases, personality traits and investment experience. Additionally, moderate profile investors’ level of psychological biases, personality traits and trading performance is somewhere between the high profile and low profile levels. This is an exploratory study to be used as a starting point for the understanding of the characteristics (overconfidence, risk tolerance, social influence, self-monitoring) of investors (including both individuals and professionals) and their trading behaviour. The results show that high scores on psychological biases and personality traits (thus overconfidence, risk tolerance, social influence and self-monitoring) are associated with high scores on aspects of trading behaviour such as trading performance, trading frequency and trading volume. This study may provide investment advisors with a framework to understand clients’ attitude and thus allow advisors to give better advice to their clients depending on each client's profile. Finally, this study also offers insights into investors, as they can understand the trading behaviour of each investor's profile and compare it with their own investment characteristics, their trading behaviour and their performance. Ultimately, it will provide a framework that will help investors understand how biases and traits affect investment decisions and thus they may be able to become aware of and overcome them. One major limitation of this study is that it is based on the self-assessed biases, traits and trading behaviour of each respondent. It is important for future research to be directed towards collecting more objective data as far as these crucial parameters are concerned. Moreover, it is not clear which are the stronger parameters that actually influence trading behaviour. Further research could expand the scope of this research by examining the magnitude of the effect of these parameters on investor trading behaviour. Also, a direct comparison between individual and professional investors’ trading behaviour would enhance our knowledge/comprehension of investors’ trading behaviour.