The impact of the financial tsunami on stock investment behavior: the case of individual investors in Taiwan

Min-Hua Kuo, Po-Kai Huang, Wen-Jhan Jane
2013 Investment Management & Financial Innovations  
This paper investigates how the financial tsunami changed individual investors' attitudes toward risk and investment behavior in Taiwan. The empirical results show that the global financial crisis greatly impacted investors; more than 50% of investors claim their financial position severely worsened. After 15 months one third of investors had not recovered their financial losses. Generally, the individual investors who went through the financial tsunami became more risk-averse, traded less, and
more » ... e, traded less, and were more inclined to realize losses. In addition, the more severe their financial losses, the more risk-averse the investors became and the less amount they traded.
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