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Do the Portfolios of Small InvestorsReflect Positive Feedback Trading?

Published online by Cambridge University Press:  06 April 2009

Mary M. Bange
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Extract

This study examines the stock market forecasts andportfolio allocation decisions of small individualinvestors, based on survey data for 1987–1994. Wheninvestors are bullish, they increase their equityholdings; when investors are bearish, they decreaseequity holdings. The surveyed investors are unableto time the stock market successfully. However, theshifts in their portfolios reflect past marketmovements and are consistent with positive feedbacktrading.

Information

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 35 , Issue 2 , June 2000 , pp. 239 - 255
Copyright
Copyright © School of Business Administration, University of Washington 2000

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Footnotes

*

Darla Moore School of Business, University ofSouth Carolina, Columbia, SC, 29208. I thanknumerous collagues for comments, including TyroneCallahan, Werner De Bondt, Diane Del Guercio, JimGranato, Todd Houge, Paul Malatesta (the editor),Mike Mazzeo, Tom Miller, Ted Moore, Greg Niehaus,Eric Schorvitz, and Mark Carhart (the referee).This was presented at the 1998 FinancialManagement meeting and the 1999 Western FinanceAssociation meeting. I am grateful to LeighRiddick, The Economist magazine,and Paul Garverick and Marie Zwick from theAmerican Association of Individual Investors forproviding data. The usual caveat applies.

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