Inside the Mind of Investors During the COVID-19 Pandemic: Evidence from the StockTwits Data
Forthcoming, Journal of Financial Data Science
Posted: 24 Apr 2020 Last revised: 11 Nov 2020
Date Written: April 23, 2020
We study the investor beliefs, sentiment and disagreement, about stock market returns during the COVID-19 pandemic using a large number of messages of investors -- about 3.7 million messages -- on a social media investing platform,StockTwits. The rich and multimodal features of StockTwits data allow us to explore the evolution of sentiment and disagreement within and across investors, sectors, and even industries. We find that the sentiment (disagreement) has a sharp decrease (increase) across all investors with any investment philosophy, horizon, and experience between February 19, 2020, and March 23, 2020, where a historical market high followed by a record drop. Surprisingly, these measures have a sharp reverse toward the end of March. However, the performance of these measures across various sectors is heterogeneous. Financial and healthcare sectors are the most pessimistic and optimistic divisions, respectively.
Keywords: Sentiment, Disagreement, Stock Market, COVID-19 Pandemic
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