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The Influences of Greed And Fear on Fund Performance

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  • Chun An Li
  • Jia Chi Wang

Abstract

This paper discusses if the psychological changes of investors would influence mutual funds from the perspective of behavioral finance. In other words, we assess the psychological state of investors from the deepest psychological factors of greed and fear, and discuss whether the psychological changes in these investors would influence a mutual fund. This study presented evidence that the psychological changes of investors were related to fund performance. It better illustrated how fund performance was affected by the psychology of investors, especially from irrational behavior driven by fear and greed.

Suggested Citation

  • Chun An Li & Jia Chi Wang, 2013. "The Influences of Greed And Fear on Fund Performance," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 7(5), pages 47-57.
    • Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:5:p:47-57
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    1. Khyati Kathuria & Nand Kumar, 2022. "Pandemic‐induced fear and government policy response as a measure of uncertainty in the foreign exchange market: Evidence from (a)symmetric wild bootstrap likelihood ratio test," Pacific Economic Review, Wiley Blackwell, vol. 27(4), pages 361-379, October.

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    More about this item

    Keywords

    Volatility Index (VIX); Greed; Fear; Mutual Fund Performance;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles

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