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Come Together: Trust, Sociability, and Individual Investors’ Financial Decisions
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration. Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE).
2018 (English)Conference paper, Oral presentation with published abstract (Refereed)
Abstract [en]

Previous studies have found trusting and social individuals to be more likely to participate in the stock market and to hold risky assets but why is this and does individuals that already participate in the stock market benefit from being more trusting and social? In this paper, I try to answer these questions by combining survey and administrative data for a random sample of individual investors in Sweden. More specifically, I test whether trust and sociability are associated with the financial information investors use when making their financial decisions and with the returns of their stock portfolios. I find that investors who trust information from media and financial advisors use these two sources of information more frequently when making their financial decisions compared to less trusting investors. Similarly, social investors use information from friends, family, and financial forums more frequently than less social investors. Finally, I find that trusting and social investors acquire higher simple and risk-adjusted stock-portfolio returns suggesting that an increase in both trust and sociability can help investors to make better financial decisions.

Place, publisher, year, edition, pages
2018.
Keywords [en]
trust, sociability, individual investors, portfolio return, financial decisions
National Category
Business Administration Economics
Identifiers
URN: urn:nbn:se:umu:diva-150254OAI: oai:DiVA.org:umu-150254DiVA, id: diva2:1235637
Conference
SABE/IAREP
Available from: 2018-07-26 Created: 2018-07-26 Last updated: 2018-11-16

Open Access in DiVA

No full text in DiVA

Other links

https://economics.mdx.ac.uk/sabe-2018/wp-content/uploads/2018/07/BoA_SABE-IAREP-2018_v2.pdf

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Stålnacke, Oscar

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf