Inside the Mind of Investors During the COVID-19 Pandemic: Evidence from the StockTwits Data

33 Pages Posted: 24 Apr 2020 Last revised: 26 May 2020

Date Written: April 23, 2020

Abstract

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

Suggested Citation

Fallahgoul, Hasan A, Inside the Mind of Investors During the COVID-19 Pandemic: Evidence from the StockTwits Data (April 23, 2020). Available at SSRN: https://ssrn.com/abstract=3583462 or http://dx.doi.org/10.2139/ssrn.3583462

Hasan A Fallahgoul (Contact Author)

Monash University ( email )

Clayton Campus
Victoria, 3800
Australia

HOME PAGE: http://www.hfallahgoul.com

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