Abstract
Abstract. This paper investigates the decision-making of small investors in the Hong Kong bank stock market.The objective of this study was to search the factors, investing characteristics, and decision-making processes that affect Hong Kong small investors who participate in bank stock market.The results suggest that we can derive the following ascending order of importance of factors:reference group, stock nature, returnsperformance and bank performance. Reference group is the least important factor and bank performance is the most important factor. We used Kendall rank correlation coefficients to measure thedifferent ranking of factorsand are therefore attempting to give advice for financial advisers approaching target customers in Hong Kong.
Keywords.Investment decision, smallinvestors, bank stock markets, Hong Kong.
JEL. G02, G10, G11.
References
Appleyard, D., Field, A., Cobb, S. (2009). International Economics. McGraw-Hill
Cantor,, D.G., & Lippman, S.A. (1995). Optimal investment selection with a multitude of projects, Econometrica, 63(5), 1231–1241. doi. 10.2307/2171729
Chan, K., Covrig, V., & Ng, L. (2005). What determines the domestic bias and foreign bias? Evidence from mutual fund equity allocation worldwide. Journal of Finance, 60, 1495-1534. doi. 10.1111/j.1540-6261.2005.768_1.x
Cohen, G., & Kudryavtsev, A. (2012). Investor Rationality and Financial Decisions, Journal of Behavioral Finance, 13(1), 11-16. doi. 10.1080/15427560.2012.653020
Cooper, I., & Kaplanis, E. (1994). Home bias in equity portfolios, inflation hedging, and interna¬tional capital market equilibrium, Review of Financial Studies, 7(1), 45 60. doi. 10.1093/rfs/7.1.45
Eun, C., Kolodny, R., & Resnick, B. (2002). Performance of U.S. Based International Mu¬tual Funds, Journal of Portfolio Management, 17, 88 94. doi. 10.3905/jpm.1991.409387
French, K., & Poterba, J. (1991). Investor diversification and international equity markets, American Economic Review, 81, 222 26.
Fung, E.S., Lam, K., Siu, T.K. & Wong, W.K. (2011). A Pseudo-Bayesian Model for Stock Returns In Financial Crises, Journal of Risk and Financial Management, 4(1), 43-73. doi.10.3390/jrfm4010043
Glassman, D., & Riddick, L. (1993). Why empirical portfolio models fail: Evidence that model misspecification creates home asset bias, unpublished manuscript.
Grubel, H. G. (1968). Internationally diversified portfolios. American Economic Review, 58,
Hirshliefer, J. (1958). On the theory of optimal investment decisions, Journal of Political Economy, 66(4), 329-352.
Hirshleifer, J. (1961). Risk, the discount rate, and investment decision, American Economic Review, 51(2), 112-120.
Lewellen, W.G., Lease, R.C., & Schlarbaum, G.G. (1977). Patterns of investment strategy and behavior among individual investors, Journal of Business, 50(3), 296-333. doi. 10.1086/295947
Lumby, S., & Jones, C. (2011). Corporate Finance: Theory & Practice (8th ed.). United Kingdom: Cengage Learning EMEA.
Nunally, C.J, (1978). Psychometric Theory, New York, McGraw-Hill
Peterson, R.L. (2002). “Buy on the rumor”: Anticipatory affect and investor behavior, Journal of Psychology and Financial Markets, 3(4), 218-226. doi. 10.1207/S15327760JPFM0304_03
Tesar, L., & Wemer, I. (1993). Home bias and high turnover, unpublished manuscript.
Wang, M., Keller, C., & Siegrist, M. (2011). The less You know, the more You are afraid of — A survey on risk perceptions of investment products, Journal of Behavioral Finance, 12(1), 9-19. doi. 10.1080/15427560.2011.548760
