The effects of trading experience on information processing and investment performance

• Main Authors: Yu-Chieh Lin, 林郁捷
• Other Authors: 呂麒麟
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/uheq92

碩士 === 國立虎尾科技大學 === 經營管理研究所 === 98 === More studies show that individual investors learn from their trading experience, and they adjust their behavior to improve their investment performance. However, researches in financial behavior have documenting biases of individual investors. In fact, the implementation of investment decision-making is based on psychological dimension of behavioral finance, so investors make various mistakes cause negative investment performance. As investors’ trading experience increases, so does her/his ensuing overconfidence and disposition effect. Determining whether investors learn from their experience-specifically, whether trading experience affects behavior and, perhaps more importantly, improves investment performance-would be a significant purpose of this study. This research is based on trading experience as the main variable, and be the amendment for Schiffman and Kanuk’s(2000) simple three-phase model of consumer decision into investor investment behavior model. To further explore the impact of trading experience on information handling process and investment performance of the individual investors in Taiwan. The empirical results of this thesis show that. first, investors’ trading experience is significantly relative to information behavior. Second, individual investors’ information behavior is significantly relative to portfolio performance. Finally, the individual investors’ trading experience isn’t significantly relative to portfolio returns. As anticipated, we find evidence that experienced investors are not better to give a correct estimate of their own past realized stock portfolio performance. In sum, individual investors’ experience can lessen the simple mathematical error of estimating portfolio returns, but seems not to influence their behavioral mistakes pertaining to how good (in absolute sense or relative to other investors)they are.