I use a novel dataset based on 8,000 retail clients of a large brokerage house over four years to evaluate if individual investors take decisions according to one of the dominating decision-making theories – traditional Expected Utility Theory or behavioural Prospect Theory. Another key question of my research is the role of affect in judgements and its impact on investment results and behaviour. The thesis includes three related empirical chapters. In the first empirical chapter, I explore how (ir)rational are retail investors and what are the boundaries of their rationality proxied with the relation between realised risk and return. In the second empirical chapter, I examine how the correlation between risk and return for the same group of investors varies in Live trading environment versus virtual Contest environment highlighting the role of emotions in correlation dynamics. In the third empirical chapter, I keep the emphasis on comparing Live and Contest investment settings, but now I evaluate the impact of emotions on profitability and various manifestations of risk behaviour. My research contributes to the academic literature in the domain of finance and investments that is trying to establish the positioning and the role of emotional account in the judgement and decision-making of economic agents. I provide empirical evidence that feelings have a substantial impact on investment results and risk behaviour of individual traders. The empirical nature of my analysis involving a large group of private investors grants significant support to prior findings that predominantly developed using neuro-physiological, interview-type and experimental methodologies. Besides, I present empirical support for the long-lasting debate concerning traditional and behavioural financial theories. Analysing the relation between risk and return, I manage to validate that investors in my sample manifest all behavioural patterns implied by Prospect Theory: they are risk-averse in the gains domain, risk-seeking in the losses domain and exposed to the loss aversion bias.
Item Type: | Thesis (PhD) |
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Qualification Level: | Doctoral |
Keywords: | behavioural finance, individual investors, individual decision making, risk-as-feelings. |
Subjects: | > |
Colleges/Schools: | > > |
Supervisor's Name: | Siganos, Dr. Antonios and Hung, Dr. Chi-Hsiou |
Date of Award: | 2021 |
Depositing User: | |
Unique ID: | glathesis:2021-81951 |
Copyright: | Copyright of this thesis is held by the author. |
Date Deposited: | 27 Jan 2021 17:52 |
Last Modified: | 28 Jan 2021 07:59 |
Thesis DOI: | |
URI: |
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Investment Thesis: An investment thesis is the beliefs that investors decide to use when determining what investments to purchase or sell, when to take an action and why. An investment thesis ...
Updating the Investment Thesis. As time progresses it is crucial to revisit and update your investment thesis accordingly. Markets are constantly changing and it is crucial to stay updated with information that emerges. Your initial assumptions may not always hold true which can lead to poor investment decisions if you stick to an investment ...
October 29, 2023 by Abi Tyas Tunggal. An investment thesis is a well-reasoned argument that supports a specific investment decision, playing a vital role in the strategic planning process for individual investors and businesses alike. It comprises detailed research and analysis to evaluate an investment's potential profitability.
An investment thesis can make you a more successful investor. Thinking through and crafting a thoroughly researched investment thesis can help you make better informed investing decisions.
Upon completion of the VC Decision Making (Online): Developing an Investment Thesis program, you will receive a certificate of participation from Columbia Business School Executive Education — a powerful testament to your management capabilities — and add two days toward a Certificate in Business Excellence. Download Brochure.
An investment thesis is a crucial tool for guiding your investment decisions and achieving your financial goals. Building a strong investment thesis involves in-depth research, clear objectives, careful risk assessment, and alignment with your risk tolerance and time horizon.
Step 1: Start With the Essentials. First things first. Before you get into doing the research that goes into an investment thesis or stock pitch, make sure you take the time to write out the basics. At the top of the page, include things like: The name of the company and its ticker symbol. Today's date.
The investment thesis is no more or less than a definitive statement, based on a clear understanding of how money is made in your business, that outlines how adding this particular business to your portfolio will make your company more valuable. ... Mayses' decision to move from radios into outdoor advertising (billboards, to most of us). Based ...
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An investment thesis is the reasoning behind an investment strategy, based on research and analysis, helping investors make informed decisions. Conversely, an investment mandate is a set of instructions given by an investor to a manager, guiding how to manage funds according to the investor's goals, risk tolerance, and desired outcomes.
An investment thesis is a critical tool for investors seeking to make well-informed and disciplined investment decisions. By establishing clear objectives, conducting thorough research and analysis, and defining specific criteria for evaluating opportunities, an investment thesis helps mitigate risks and increase the likelihood of achieving ...
Step three: Portfolio construction. A thoughtful portfolio is critical to running a successful fund and shaping your overall investment thesis. Your strategy for portfolio construction signals to LPs how you plan to allocate their capital across investments. Your fund's investment portfolio is essentially the roadmap for the life of the fund.
An investment thesis is a critical tool for investors that outlines the rationale and framework behind their investment decisions. It serves several important purposes, including: Clarity in decision-making - An investment thesis clarifies the decision-making process by establishing a clear framework and criteria for making investment choices.
My investment thesis revolves around the belief that owning a single-family home on the west side of San Francisco is a sound decision. Local economic catalysts, including the opening of a large school in the fall of 2024 and the $4 billion renovation of the UCSF Parnassus Hospital by 2030 (expected to create 1400 new jobs), indicate a positive ...
An investment thesis applies to any form of investing, from the stock market to horse racing… as long as it involves putting your money behind a principled decision. These decisions are not just for beginners; experts in the field like Warren Buffet, and Peter Thiel have spent years developing their own personal strategies.
An investment thesis is a concise statement that outlines an investor's belief about the potential returns and risks of a particular investment. It is a framework that helps investors make decisions about what to buy, sell, or hold in their portfolio, and it is based on a thorough analysis of a company's financials, market conditions, and ...
Step 2: Conducting Market Research. An investment thesis that is not backed by data is just opinion. To write the perfect investment thesis you need to conduct market research. This includes analyzing market trends, identifying potential risks and benefits, and conducting competitive analysis.
An investment thesis refers to a set of criteria and principles that investors use to guide their decision-making process when evaluating potential investment opportunities. It serves as a framework that helps investors determine whether an investment aligns with their goals and risk tolerance. . 1. Why is an investment thesis important?
Thesis, UAS Published 2022 Number of pages 56 Title of Publication Drivers of investment decisions Investment goals and motives of young adults Degree and field of study Bachelor of Business Administration, International Business Name, title and organization of the client (if the thesis work is commissioned by another party) No commission. Abstract
I use a novel dataset based on 8,000 retail clients of a large brokerage house over four years to evaluate if individual investors take decisions according to one of the dominating decision-making theories - traditional Expected Utility Theory or behavioural Prospect Theory. Another key question of my research is the role of affect in judgements and its impact on investment results and ...
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