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Journal of Financial and Quantitative Analysis Vol. 50 No. 1-2 2015

Do Happy People Make Optimistic Investors?

Guy Kaplanski1,2,3; Haim Levy1,2,3; Chris Veld1,2,3; Yulia Veld-Merkoulova

1 Hebrew University of Jerusalem · 2 University of Exeter · 3 University of Glasgow

open access

Abstract

Do happy people predict future risk and return differently from unhappy people, or do individuals rely only on economic facts? We survey investors on their subjective sentiment-creating factors, return and risk expectations, and investment plans. We find that noneconomic factors systematically affect return and risk expectations, where the return effect is more profound. Investment plans are also affected by noneconomic factors. Sports results and general feelings significantly affect predictions. Sufferers from seasonal affective disorder have lower return expectations in the autumn than in other seasons, supporting the winter blues hypothesis.

DOI
10.1017/s0022109014000416
Volume
50
Issue
1-2
Pages
145-168
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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