Do happy people make optimistic investors?

Guy Kaplanski, Haim Levy*, Chris Veld, Yulia Veld-Merkoulova

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

75 Scopus citations

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.

Original languageEnglish
Pages (from-to)145-168
Number of pages24
JournalJournal of Financial and Quantitative Analysis
Volume50
Issue number1-2
DOIs
StatePublished - 1 Apr 2015

Bibliographical note

Publisher Copyright:
© Michael G. Foster School of Business, University of Washington 2014.

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