Abstract
Abstract. The primary objective is to investigate the factors, investing characteristics and decision making processes that affect Hong Kong’s small investors who participate in derivatives markets. The data were collected from 1,130 respondents via a questionnaire survey. Based on the results, we can derive the ascending order of importance of reference group, return performance and personal background (reference group is the least important and personal background is the most important).We used an indicator (Kendall rank correlation coefficients) to measure the different ranking of factors and are therefore attempting to give advice for financial advisers approaching target customers (small investors) in the Hong Kong derivatives markets.
Keywords. Rank correlation, Investment decision, Small investors, Derivatives markets, Hong Kong.
JEL. G02, G10 G11.
References
Carmines, E.G., & Zeller, R.A. (1979). Reliability and Validity Assessment, Sage.
Cattell, R.B. (1966). The Meaning and Strategic Use of Factor Analysis. Handbookof Multivariate Experimental Psychology, Chicago: Rand-McNally.
Enoma A., & Isedu, M. (2010).FactorAnalysis of Investment Decision in Nigerian Insurance Companies. Interdisciplinary Journal of Contemporary Research inBusiness, 2(8), 108-119.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision making under risk. Econometrica, 47(2), 263-291. doi:10.2307/1914185
Kendall, M.G. (1955). Rank Correlation Methods. New York: Hafner Publishing Co.
Korniotis, G.M., & Kumar, A. (2011). Do older investors make better investment decision?. The Review of Economics and Statistics, 93(1), 244-265.doi:10.1162/rest_a_00053
Nunnally, J.C. (1978). Psychometric Theory. (2nd ed.). New York: McGraw-Hill.
Sparaggis, T.D. (1995). Factor and spread analysis of the convertible securities market. Financial Analysts Journal, 68-73. doi:10.2469/faj.v51.n5.1938
Tversky, A., & Kahneman, D. (1974). Judgement under uncertainty: Heuristics and Biases. Science, 185, 1124-1131. doi:10.1126/science.185.4157.1124
Williams, G. (2007). Some determinants of the socially responsible investment decision: A cross-country study. The Journal of Behavioral Finance, 8(1), 43-57. doi:10.2139/ssrn.905189
