IDEAS home Printed from https://ideas.repec.org/a/taf/rsarxx/v30y2016i1p29-40.html
   My bibliography  Save this article

An investigation of investors’ estimates of returns earned and the effect of anchoring on these estimations

Author

Listed:
  • G Dowie
  • G Willows

Abstract

This study examines overconfidence and anchoring in an investing environment to determine if there is evidence of the phenomenon amongst a sample of academics at participating universities.A survey was sent out to over 6,000 staff members at four South African universities assessing respondents’ estimations of their returns earned in unit trusts in which they were invested, as well as assessing whether they would adjust their estimate when presented with an anchor – the relevant Johannesburg Stock Exchange (JSE) All Share Index return. A total of 466 completed responses were obtained, of which 81 respondents indicated that they were invested directly in a South African equity unit trust to allow for statistical testing. The data obtained were analysed for evidence of overconfidence and anchoring by comparing respondents’ estimates of fund returns against historical returns and then checking whether they adjusted their estimate after being presented with an anchor.The study found that investors were under-confident rather than overconfident. Furthermore, it was found that older respondents were better able to estimate their past returns than younger respondents. The presence of an anchor appeared to have no effect on respondents’ estimates.

Suggested Citation

  • G Dowie & G Willows, 2016. "An investigation of investors’ estimates of returns earned and the effect of anchoring on these estimations," South African Journal of Accounting Research, Taylor & Francis Journals, vol. 30(1), pages 29-40, January.
    • Handle: RePEc:taf:rsarxx:v:30:y:2016:i:1:p:29-40
    DOI: 10.1080/10291954.2015.1021559
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10291954.2015.1021559
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10291954.2015.1021559?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rsarxx:v:30:y:2016:i:1:p:29-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rsar .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.