Please use this identifier to cite or link to this item: http://hdl.handle.net/2440/107684
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Type: Journal article
Title: How return and risk experiences shape investor beliefs and preferences
Author: Hoffmann, A.
Post, T.
Citation: Accounting & Finance, 2015; 57(3):759-788
Publisher: Wiley
Issue Date: 2015
ISSN: 0810-5391
1467-629X
Statement of
Responsibility: 
Arvid O. I. Hoffmann, Thomas Post
Abstract: Combining brokerage records and matching monthly survey measurements of a sample of individual investors from the Netherlands for the period April 2008 through March 2009, we examine how individual investors update their beliefs (return expectations and risk perceptions) and preferences (risk tolerance) as a result of their personal return and risk experiences. We find that investors' past returns positively impact return expectations and risk tolerance, and negatively impact risk perceptions. Realised risk, however, has no effect. That is, even in a highly volatile stock market period in which risk appears very salient, investors do not take it into account when updating their beliefs and preferences.
Keywords: Behavioural finance; individual investors; return experiences; risk experiences; investor beliefs; investor preferences
Rights: © 2015 AFAANZ
RMID: 0030059887
DOI: 10.1111/acfi.12169
Appears in Collections:Business School publications

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