Do Happy People Make Optimistic Investors?

37 Pages Posted: 30 Dec 2015  

Guy Kaplanski

Bar-Ilan University - Graduate School of Business Administration

Haim Levy

Hebrew University of Jerusalem - Jerusalem School of Business Administration; Fordham University

Chris Veld

Monash University

Yulia V. Veld-Merkoulova

Monash University - Department of Finance; Financial Research Network (FIRN)

Date Written: February 13, 2015

Abstract

Do happy people predict future risk and return differently from unhappy people, or do individuals rely only on economic facts? We survey investors on their subjective sentiment-creating factors, return and risk expectations, and investment plans. We find that non-economic factors systematically affect return and risk expectations, where the return effect is more profound. Investment plans are also affected by non-economic factors. Sports results and general feelings significantly affect predictions. Sufferers from seasonal affective disorder have lower return expectations in the autumn than in other seasons, supporting the Winter Blues hypothesis.

Keywords: sentiment-creating factors, sentiments, individual investors, mood, seasonal affective disorder

JEL Classification: G02, G10, G14

Suggested Citation

Kaplanski, Guy and Levy, Haim and Veld, Chris and Veld-Merkoulova, Yulia V., Do Happy People Make Optimistic Investors? (February 13, 2015). Journal of Financial and Quantitative Analysis (JFQA), Volume 50, (2015), 145-168.. Available at SSRN: https://ssrn.com/abstract=2009319 or http://dx.doi.org/10.2139/ssrn.2009319

Guy Kaplanski

Bar-Ilan University - Graduate School of Business Administration ( email )

Ramat Gan
Israel

Haim Levy

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel

HOME PAGE: http://pluto.huji.ac.il/~mshlevy/

Fordham University ( email )

140 West 62nd Street
New York, NY 10023
United States

Chris Veld

Monash University ( email )

Building 11E
Clayton, Victoria 3800
Australia

Yulia V. Veld-Merkoulova (Contact Author)

Monash University - Department of Finance ( email )

Building H
Caulfield, Victoria 3145
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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