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Investor happiness

Author

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  • Merkle, Christoph
  • Egan, Daniel P.
  • Davies, Greg B.

Abstract

We study investor happiness in a panel survey of brokerage clients at a UK bank. When investors anticipate future happiness, they set their return aspirations according to personal portfolio risk, objectives, investment horizon, confidence, and other individual characteristics. They are accurate in their forecasts, only rarely are investors unhappy with outcomes they predicted they would be happy with, and vice versa. However, determinants of experienced happiness only partially correspond to the ones found for anticipated happiness. In particular, relative performance plays an important role investors do not anticipate. Having outperformed other people contributes to investor happiness, as does active trading success.

Suggested Citation

  • Merkle, Christoph & Egan, Daniel P. & Davies, Greg B., 2015. "Investor happiness," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 167-186.
  • Handle: RePEc:eee:joepsy:v:49:y:2015:i:c:p:167-186
    DOI: 10.1016/j.joep.2015.05.007
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    References listed on IDEAS

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    Cited by:

    1. Dickason Koekemoer & Z Munyai & L. S. Ferreira S. J, 2019. "Income and Subjective Financial Well-Being as Determining Factors of Life Satisfaction," Journal of Economics and Behavioral Studies, AMH International, vol. 11(1), pages 122-128.

    More about this item

    Keywords

    Happiness; Anticipation; Experience; Return expectations; Individual investors;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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