Individual Investors and the Financial Crisis

43 Pages Posted: 15 Mar 2011 Last revised: 20 Nov 2015

See all articles by Jarl Kallberg

Jarl Kallberg

Independent

Crocker H. Liu

Arizona State University

Na Wang

Hofstra University - Frank G. Zarb School of Business

Date Written: March 12, 2014

Abstract

This paper studies the trading behavior of individual Chinese investors before and during the recent…financial crisis.We have three major …findings: (i) individual investors did not withdraw their capital from the equity market during the crisis; instead, they reduced investments following portfolio gains; (ii) the asymmetric net‡ flow decisions are strongly influenced ‡by the disposition effect, in the absence of tax effects; this fi…nding holds over our entire sample period and it is even stronger during the crisis; (iii) individual investors revised their portfolios to hold relatively safer and more liquid stocks.

Keywords: individual investors, financial crisis, net flows, portfolio risk

JEL Classification: G01, G11, G15

Suggested Citation

Kallberg, Jarl and Liu, Crocker H. and Wang, Na, Individual Investors and the Financial Crisis (March 12, 2014). Available at SSRN: https://ssrn.com/abstract=1784565 or http://dx.doi.org/10.2139/ssrn.1784565

Jarl Kallberg

Independent ( email )

No Address Available

Crocker H. Liu

Arizona State University ( email )

W.P. Carey School of Business
P.O. Box 873906
Tempe, AZ 85287-3906
United States
480-965-3259 (Phone)
480-965-8539 (Fax)

HOME PAGE: http://www.public.asu.edu/~chliu1

Na Wang (Contact Author)

Hofstra University - Frank G. Zarb School of Business ( email )

134 Hofstra University
Hempstead, NY 11549
United States

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