13 factors affecting overconfidence of opportunistic

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Factors Affecting Overconfidence of Opportunistic Investors In Malaysia Hypothesis 4 H0: There is a significant relationship among individual traits and existence of overconfidence among opportunistic investors in Malaysia. H1: There is no significant relationship among individual traits and existence of overconfidence among opportunistic investors in Malaysia. 1.6 Significant of Study Behavioural finance is a field of finance that proposes psychology-base theories to explain stock market anomalies. Clearly, the result of this study will highlight the overconfidence behaviour of value investors and the factors that cause overconfidence. This study able to assist opportunistic investors to understand more about their behaviour during investing and how they react to the same information with one another. Besides, after studying this research, you will have better knowledge about efficient market hypothesis and the market anomalies. 14
Factors Affecting Overconfidence of Opportunistic Investors In Malaysia CHAPTER 2: LITERATURE REVIEW 2.1 Introduction This chapter reviews the literatures such as journal articles, news articles and reference books that related to our research topic. For example, we will focus on the research resources that focused on overconfidence and behavioural finance. Based on these researches, we may further analyse behavioural finance and overconfidence and may be able to obtain a better understanding. Apart from that, we also did further review on efficiency market hypothesis and market anomalies since they have a strong relationship with overconfidence. Last but not least, in this chapter we will be discussing about the dependent variable which is overconfidence among opportunistic investors and the independent variables that including over- optimism, hindsight bias, self-attribution and individual traits. Theoretical review and conceptual framework will also be presented in this chapter. 2.2 Efficient Market Hypothesis 2.2.1 History Efficient market hypothesis (EMH) is widely accepted since a generation ago, Eugene Fama (1970) generally believe that securities markets were highly efficient in reflecting stock market securities information and the whole stock market. The news spreads quickly and are reflected into the stock prices instantly. Hence, neither technical analysis nor fundamental analysis would enable the opportunistic investor to achieve an abnormal return. Technical analysis is a trading tool used to evaluate securities by analysing past data volume or stock price movement and to predict future stock prices; fundamental 15
Factors Affecting Overconfidence of Opportunistic Investors In Malaysia analysis is a technique of evaluating an investment security by investigating accounting and economic factors to help value investor to select undervalued stocks. Thus, according to EMH, there is no possibility to outperform the stock market through expert stock selection[ CITATION Eff12 \l 17417 ].

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