Behavioural portfolio formation using mental accounting in emerging markets: the case of Saudi Arabia
AbstractThis paper aims to test whether investors in Saudi Arabia build their portfolios in a layer-by-layer form, considering them as a pyramid of assets as described by Shefrin and Statman (2000), and to investigate whether investors diversify their investments based on their aspirations. We use t-test and regression analysis to test the nine hypotheses related to investors' portfolio-building behaviour. The results show that Saudi investors are influenced by the mental accounting bias and build their portfolios as a pyramid of assets. The results also show that Saudi investors diversify their portfolio investments based on their aspirations and not efficiency.
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Bibliographic InfoArticle provided by Inderscience Enterprises Ltd in its journal Int. J. of Monetary Economics and Finance.
Volume (Year): 1 (2008)
Issue (Month): 3 ()
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Web page: http://www.inderscience.com/browse/index.php?journalID=218
assets pyramiding; behavioural finance; behavioural portfolio formation; emerging markets; portfolio investment; mental accounting; modern portfolio theory; portfolio diversification; Saudi Arabia investments; Saudi mutual funds.;
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