Optimization of investment performance based on personality traits: Acces la Success

To achieve their investment objectives, each investor has a strategy in place. A high amount of personality traits element influenced (perceived) investment performance. The purpose of this research was to test how the Big Five personality qualities affected (perceived) investment performance. The hypotheses were tested using PLS-SEM. Individual stock investors in Indonesia were studied, and the results revealed that openness and neuroticism personality had a negative impact on (perceived) investment performance. Consciousness, extraversion, and agreeableness, on the other hand, all had a positive effect on (perceived) investment performance. This research shows the importance of personality traits when allocating assets to meet investment objectives and improves behavioral finance theory.

Herd behaviour in an emerging market: an evidence of calendar and size effects

PurposeThis study aims to examine investors' herd behaviour for various calendar events and size-based stock portfolios in Pakistan. The authors consider three calendar effects, crisis (COVID-19 and financial crisis 2018–19), announcement of political news and popular calendar anomalies (month-of-the-year and day-of-the-week), and investigate the impact of stock size on calendar effect in terms of investors' herd behaviour.Design/methodology/approachThe study uses non-linear specification to capture herd behaviour using firm-level daily data for 496 stocks listed on Pakistan Stock Exchange over the period 2001–2020.FindingsThe results indicate herd formation during periods of COVID-19, financial crisis, political news announcements and January (month-of-the-year). The authors also observe significant herding for the biggest and smallest size stocks over complete period. However, the authors find more pronounced herding in big stocks during January as compared to the more noticeable herding in small stocks over complete period. The findings suggest that herding in small stocks is not the main cause of January herding and hint on the prevalence of significant institutional herding during January.Practical implicationsThe stock prices destabilize because of the mimicking behaviour during crisis periods, days of political announcements and month of January. Implementation of insider trading laws and transparent information environment can help in reducing these effects and increasing market efficiency.Originality/valueThe authors consider the recent COVID period in our analysis. In addition, we provide new evidence on the possible impact of stock size on calendar effect in terms of herd behaviour, which, to the best of the authors' knowledge, has not yet been documented in literature.

The COVID Retirement Boom and Personal Finance: How can we save and protect?

Granting periodic income payments to retirees, the Social Security system is undoubtedly an essential part of American retirement financing. Indeed, 90% of American retirees receive Social Security and 57% of its beneficiaries depend on it as the major source of income. While Social Security is indispensable to American retirement financing, retirees ought not to be unduly dependent on it, as current demographic changes imperil the institution's regulation. Over the last decade, the United States retirement population increase rate has been 33.79%, approximately seven times that of the labor force population. This pattern jeopardizes the Social Security system by raising its cost disproportionately to its income. Thus, if such a demographic trend continues, the Social Security System will no longer be able to provide retirees with income. Confronting the possibility of systemic failure of the Social Security system, I will argue in this paper that retirees must take responsibility for their own finances and voluntarily produce income through investing in two asset classes - REITs and bond ladders. My research will discuss two advisable investment plans: REITs and bond ladders. Each method will be evaluated on its safety, periodicity of income, and consistency in the income quantity. Furthermore, for each method, I will examine its upsides and downsides. This research discusses the transfer of financial responsibility from the Social Security system to individual retirees. It proposes retirement plans that the members of our community can practice to produce income. [ FROM AUTHOR] Copyright of Technium Social Sciences Journal is the property of Technium Press Constanta and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)

Foreign divestment, economic growth and development in South Africa: an empirical analysis

PurposeThe purpose of this study is to investigate the effect of foreign direct divestments (FDD) on economic growth and development in South Africa for the period 1991–2019.Design/methodology/approachThe non-linear autoregressive distributed lag technique is used for the empirical analysis. Two regression models are specified, one for economic growth and the other for development which is proxied by poverty.FindingsThe empirical results suggest that foreign divestments are detrimental to both economic growth and development. Furthermore, the results suggest that the negative effects of foreign divestments outweigh the positive effects of FDI inflows.Practical implicationsSouth African policymakers should thus use policies that promote the retention of FDI inflows together with those that attract inflows. Furthermore, policies that promote economic freedom such as transparency and reduction in the time frame for granting government permits for business operations are also of paramount importance.Originality/valueMost of the available literature on FDD focuses on the firm perspective. Available studies on the effect of FDD on economic growth do not investigate the effect of divestment on economic development. Economic growth is a necessary but not a sufficient condition for the achievement of socioeconomic development.

In Search of Sustainability and Financial Returns: The Case of ESG Energy Funds

The world is facing several challenges, and the problem of sustainable development is one of the most important. It is worth considering that European countries are playing a significant role as pioneers in building a sustainable world, such as those promises made by signing the Paris Agreement and European Taxonomy. To achieve ambitious targets within sustainable development, a huge amount of capital is necessary, while financial and capital market participants are expected to demonstrate a high level of engagement in the domain of sustainability. Facing growing interest and demand, a relatively new product—the ESG (environmental, social, and governance) investment fund—was introduced. Scientific literature is providing some controversial views regarding the overall evaluation of this product. Therefore, additional research providing different angles would contribute to a better understanding. This study examines European ESG funds in the energy sector, from the perspective of news flows and investors. It is worth noting that the authors use the word "European” to refer to members of the European Union (EU). The paper consists of the following parts. In the introduction, the current state of this issue is discussed. The following section offers a literature review and a news flow analysis that contributes to a deeper understanding of these issues. A description of the methodology applied for the data analysis follows this, and the final section presents the research results and conclusions. The authors apply statistical analysis and the Carhart model to determine the differences in the performance of the ESG and conventional funds and use their own tool for text analysis to examine the relevance of the topic of ESG to attract client interest. The authors claim that the performance of the European ESG equity funds do not show a statistically significant difference from the non-ESG equity funds in the majority of the periods examined. The application of the adjusted Carhart model demonstrates that the factor of sustainability has a non-significant and negative effect on the fund performance. Finally, the authors highlight the urgent necessity for the unified usage of keywords and terminology, such as "ESG”, "sustainability”, etc., to ensure comparison and attribution possibilities.

At the Frontier of Sustainable Finance: Impact Investing and the Financial Tradeoff, Evidence from Private Portfolio Companies in the United Kingdom

Drawing from the extremely novel impact investing landscape and the limited existing literature on the topic, it appears that investing in social enterprises should come at the cost of partially sacrificing financial returns to invested capital. This paper investigates the existence of this tradeoff by assessing how the performance of impact investing funds compares to that of traditional private equity and venture capital operators. Focusing on portfolio firm operating performance, we construct a dataset of 85 impact-investing observations and 5310 traditional observations over the period ranging from 2009 to 2020, in order to compare the performance of the traditional investor-backed firms with those of sustainable companies participated by social impact investors. Advanced matching methods such as Radius and Kernel matching suggest that the composition of the shareholding structure significantly affects the profitability of the company, with traditional firms outperforming their socially-concerned counterparts. Looking instead within the subsample of impact investor portfolio companies, and focusing only on the post-investment observations, we analyze how the percentage owned by the impact investors impacts the performance of the owned companies. The results show that, similarly to traditional ownership, a greater share controlled by impact investors leads to higher returns.

Understanding and enlightenment of the fundamentals of China's edible mushroom industry development

The development of Chinese edible fungus industry in recent years not only had favorable policy environment such as targeted poverty alleviation and a large health industry, but also was suffered the temporary impact of COVID-19. Under this situation, this paper analyzes the fundamentals of Chinese edible mushroom development, and its stability and internality, considering the countermeasures to meet the transfer of the global edible mushroom innovation center and recognizing the importance of independent innovation and original innovation in the science and technology of edible mushroom industry. It hoped to realize the reform of Chinese edible mushroom industry in terms of innovation mechanism, talent training and R&D investment, and joint efforts to achieve a strong edible mushroom country.

Fund style drift and stock price crash risk – analysis of the mediating effect based on corporate financial risk

PurposeThis paper aims to identify the direct impact of fund style drift on the risk of stock price collapse and the intermediary mechanism of financial risk, so as to better protect the interests of minority investors.Design/methodology/approachThis paper takes all the non-financial companies on the Chinese Growth Enterprise Market from 2011 to 2020 as study object and selects securities investment funds of their top ten circulation stocks to study the relationship between fund style drift and stock price crash risk.FindingsFund style drift is likely to add stock price crash risk. Financial risk is positively correlated with stock price crash risk. Fund style drift affects stock price crash risk via the mediating effect of financial risk, and fund style drift and financial risk have a marked impact on the stock price crash risk of non-state enterprises, yet a non-significant impact on that of state-owned enterprises.Originality/valueThis paper links fund style drift with stock price crash risk in an exploratory manner and enriches the study perspectives of relationship between institutional investors' behaviors and stock price crash risk, thus enjoying certain academic value. On the one hand, it furnishes a new approach to the academic frontier issue concerning financial risk and stock price crash risk, and proves that financial risk is positively correlated with stock price crash risk. On the other hand, it regards financial risk as a mediating variable of fund style drift for stock price crash risk and further explores different influencing mechanism of institutional investors' behaviors.

On the Risk Spillover from Bitcoin to Altcoins: The Fear of Missing Out and Pump-and-Dump Scheme Effects

This article examines the asymmetric volatility spillover effects between Bitcoin and alternative coin markets at the disaggregate level. We apply a frequency connectedness approach to the daily data of 11 major cryptocurrencies for the period from 1 September 2017 to 2 March 2022. We try to uncover the existence of the "fear of missing out” psychological effect and "pump-and-dump schemes” in the crypto markets. To do that, we estimate the volatility spillovers from Bitcoin to altcoin and the cryptos' own risk spillovers during bull and bear markets. The spillover results from Bitcoin to altcoin provide mixed results regarding the presence of this theory for major cryptocurrencies. However, the empirical findings carried out by the cryptos' own spillover effects fully confirm the existence of a fear-of-missing-out effect and pump-and-dump schemes in all cryptocurrencies except for USDT.

Dimensions Analysis to Excess Investment in Fuzzy Portfolio Model from the Threshold of Guaranteed Return Rates

Portfolio selection is a major topic for investors to allocate their assets and maximize their profit under constrained risk. For uncertain investment behavior in a vagueness environment, some researchers have devoted themselves to this field of fuzzy portfolio models for portfolio selection. Especially, Tsaur, Chiu and Huang in 2021 defined guaranteed return rates to excess investment for securities whose return rates are bigger than the guaranteed return rates in the fuzzy portfolio selection. However, an independent investor has original ideas in investment, and thus we need to consider more types of risk attitudes for an investor's portfolio selection when the guaranteed return rates are used to excess investment. To manage the excess investment by the risk preference, a new concept of s dimensions of excess investment is introduced to perceive the risk attitude of an investor for portfolio selection. Finally, we present a numerical example of a portfolio selection problem to illustrate the proposed model. This example shows that the higher dimensions of excess investment derive lower expected return rates with lower constrained risk than that of dimension s = 1;and we suggest lower risk preference should select a higher dimension of excess investment. Then, the dimension of excess investment s = 2 can be applied for portfolio selection when the risk preference is lower.

Spatial and temporal distances in a virtual global world: Lessons from the COVID-19 pandemic.

The experience of COVID-19 prompted us to rethink the imperatives of distance for the organization of value-creating activities globally. We advance a conceptualization of distance as representing separation in both space and time and posit that these distance dimensions represent different kinds of separation and require varied theoretical attention. We delineate the intrinsic qualities of spatial and temporal distances and theorize the impact of this extended conceptualization of distance on major tenets of international business theory and their predictions regarding the patterns of international business activity. We illustrate the ways by which varying configurations of spatial and temporal distances serve different value-creating activities and draw their implications for countries' global integration. We advance a call for more attention to time and temporal distance and their impact on the ways firms organize their value-creating activities in an increasingly virtual world.

L'expérience de COVID-19 nous a incités à repenser les impératifs de la distance pour l'organisation d'activités créatrices de valeur au niveau mondial. Nous conceptualisons la distance comme un construit représentant la séparation à la fois dans l'espace et dans le temps, et postulons que ces dimensions de la distance représentent différents types de séparation et nécessitent une attention théorique variée. Nous spécifions les qualités intrinsèques des distances temporelles et spatiales, et théorisons l'impact de cette conceptualisation étendue de la distance sur les principaux principes de la théorie des affaires internationales et leurs prédictions en matière de configurations d'activité en commerce international. Nous illustrons les façons dont diverses configurations de distances spatiales et temporelles servent différentes activités créatrices de valeur, et élaborons les implications pour l'intégration mondiale des pays. Nous appelons à accorder davantage d'attention au temps et à la distance temporelle, ainsi qu'à leur impact sur la manière dont les entreprises organisent leurs activités créatrices de valeur dans un monde de plus en plus virtuel.

La experiencia de COVID-19 nos instó repensar los imperativos de la distancia para la organización de actividades de creación de valor a nivel mundial. Avanzamos una conceptualización de la distancia como representación de la separación tanto en el espacio como en el tiempo y planteamos que estas dimensiones de la distancia representan diferentes tipos de separación y requieren una atención teórica variada. Delineamos las cualidades intrínsecas de las distancias espaciales y temporales y teorizamos el impacto de esta conceptualización ampliada de la distancia en los principales postulados de la teoría de los negocios internacionales y sus predicciones en relación con los patrones de la actividad de negocios internacionales. Ilustramos el modo en que las distintas configuraciones de las distancias espaciales y temporales sirven para diferentes actividades de creación de valor y extraemos sus implicaciones para la integración global de los países. Hacemos un llamamiento para que se preste más atención a la distancia temporal y al tiempo y a su impacto en la forma en que las empresas organizan sus actividades de creación de valor en un mundo cada vez más virtual.

A experiência do COVID-19 nos levou a repensar os imperativos de distância para a organização de atividades de criação de valor globalmente. Avançamos uma conceituação de distância como representação de separação tanto em espaço quanto em tempo e postulamos que essas dimensões de distância representam diferentes tipos de separação e requerem atenção teórica distinta. Delineamos as qualidades intrínsecas das distâncias espaciais e temporais e teorizamos o impacto dessa conceituação estendida de distância nos principais pilares da teoria em negócios internacionais e suas previsões a respeito dos padrões de atividade em negócios internacionais. Ilustramos formas pelas quais distintas configurações de distâncias espaciais e temporais atendem a diferentes atividades de criação de valor e descrevemos suas implicações para a integração global de países. Propomos um apelo por maior atenção a tempo e distância temporal e seu impacto nas maneiras pelas quais empresas organizam suas atividades de criação de valor em um mundo cada vez mais virtual.

Do Socially Responsible Indices Outperform the Market During Black Swan Events: Evidence from Indian Markets During Global Financial and COVID-19 Crises

This paper aims to examine and compare the effect of black swan events on the performance of companies with strong Environmental, Social, and (Corporate) Governance (ESG) backgrounds with that of other companies. Compared to established firms, companies with ESG backgrounds are perceived to be stable that will help them outperform established companies that are volatile during times of crisis. This research focuses on SENSEX for conventional market index and BSE GREEENEX and S&P BSE CARBONEX for ESG indices. We evaluated performances of the three indices during U.S. Debt Ceiling Crisis (201112), Black Monday China, BREXIT and Demonetization (2015-16), and COVID-19 (2020) crisis. We checked whether ESG indices outperformed conventional index significantly using Student's T-test. We have also compared the volatility of the three indices during the different black swan periods using the GARCH model.

INVESTMENT DYNAMICS IN THE EMERGING MARKET: COVID-19 INFLUENCE

The COVID-19 pandemic had a tangible impact on Indonesia’s economy to a 4.5% economic growth contraction (Husnulwati & Yanuarsi, 2021). To analyze the dynamics of investment in the emerging market and the effects of COVID-19 associated with the work creation law in Indonesia. This study is research in the field of law with an empirical legal research approach. The Job Creation Law provides simplifications, especially concerning business licensing and investments that can be made starting from the micro, small and medium enterprises (MSME) level. The COVID-19 pandemic can be interpreted as momentum for Indonesia to attract more investors. The world economy has had significant changes, especially in exports and imports, coupled with the trade war between China and the United States (Sumarni, 2020). Still, several things must be paid attention to, namely: the long-term effect of investment after the amendment of investment provisions in the water, electricity, weapons, and defense business sectors;and the formulation of implementing regulations in the Job Creation Law because so far, Indonesia has been known to be slow in formulating laws and regulations. © 2022 The Authors.

Incentives to Enhance Production Reliability against Disruption: Cost-Sharing vs. Penalty

Two kinds of incentive strategies, cost-sharing and penalty, are examined in dealing with production disruption, with consideration of production process reliability as an endogenous factor for a two-echelon supply chain. Based on the Stackelberg game framework, we derive the optimal decisions of supply chain partners and compare their expected profits with different strategies. Considering the uncertain demand and the retailer’s preference against the risk, we further analyze how the partners’ decisions and the retailer’s expected profit are influenced by the feature of loss aversion. From theoretical analysis and numerical experiments, we find that: (1) overall, a penalty strategy dominates that of cost-sharing for the retailer, whereas the reverse applies with respect to the manufacturer;(2) a penalty strategy may outperform a cost-sharing strategy for the whole supply chain, depending on demand;and (3) a reasonable aversion against risk can help the retailer to achieve a more robust result when a penalty strategy is adopted under volatile and unpredictable demand.

Sustainable and responsible investment funds in Europe

Purpose>The sustainable and responsible investing (SRI) is the part of sustainable investment which focusses on mutual funds. The purpose of this paper is to map and evaluate all the active European SRI funds, their performances and correlation with the national identity.Design/methodology/approach>The sample of the research was analysed with descriptive statistics, mainly the frequency, the mean and the correlation analysis. A well-known volatility is represented by the synthetic risk and reward indicator (SRRI). Other two ratings are the environmental, social and governance (ESG) funds score distribution and the ESG funds letter rating distribution.Findings>SRI investment may seem to be performing better than in the funds with a different focus. The segment of SRI funds will grow for the next decade.Research limitations/implications>There is a lack of definitions and clear metrics for sustainable investing. For better performance, it would be also appropriate to examine each country separately.Practical implications>This paper is part of the project targeting to design a model and methodology of SI evaluation taking into account ESG factors and risks, including profitability in a selected sector. This model can be used by investors for better decision-making.Social implications>The paper focusses on the funds selecting investments that fulfil ESG criteria, which are part of the social responsibility and sustainability.Originality/value>An analysis of the current approaches to evaluating investments shows that the key barrier in the transitions to sustainable investment is not taking into account the ESG factors. The research in this paper includes the ESG factors in the evaluation.

Investment returns from reputation investing: do good firms provide good returns?

Purpose>This study aims to examine whether a good corporate reputation leads to superior investment returns. Theory and empirics provide support for the idea that a good corporate reputation improves firm value, but much of the previous research fails to consider the risk of the companies they study and relies only on accounting measures of performance such as return on assets. A complete picture of the relationship between corporate reputation and shareholder value should include risk-adjusted returns and correlation with benchmark returns.Design/methodology/approach>The Harris Poll Reputation Quotient (RQ), based on the reputations of the 100 most visible companies, suggests that companies with a “solid reputation” are more likely to be attractive investments. The authors construct portfolios using deciles and the RQ categories, rebalancing annually as RQ rankings are updated. Returns are adjusted for risk using Jensen's alpha, the information ratio, the Sharpe ratio, Modigliani and Modigliani's M2 measure, and Muralidhar's M3 measure.Findings>The results indicate that choosing a portfolio based on the highest RQ-ranked firms does outperform the market on a risk-adjusted basis, and that the relationship between rankings and time-weighted returns is roughly monotonic. The authors also observe that corporate reputation is persistent, and that the best and worst most-visible firms are more likely to be privately held.Originality/value>This research adds to the literature by including both market-based return measures and risk in the examination of the relationship between corporate reputation and financial performance.

Monitoring Stock Market Returns: A Stochastic Approach

Financial analysis plays a major role in investing the disposable income of various economic agents. Stock markets are predominantly made up of small investors with limited information and low capabilities for a suitable analysis. Researchers, as well as practitioners, are divided over the findings on the adequacy of technical analysis in investing. This paper examines the Markov chain process in the stock market to discover the essential links and probabilities for the stocks' transition through three states of stagnation, growth, and decline (i.e., stagnant, bull, and bear markets). The subject of analysis is a randomly selected portfolio of 20 shares traded on the New York Stock Exchange. The data suggest that the portfolio relatively quickly, in four trading days, achieves equilibrium probabilities that allow a certain amount of predictability of future movements. At the same time, when analyzing the expected time intervals for the first transition, we found that the portfolio returns to a state of growth much faster than a decline. In addition, the results negate the basic habits of frequent trading, herding, and taking a short position in events of negative price fluctuations. Our research contributes towards observing regularities and stock market efficiency with a clear goal of improving expectations and technical analysis for small individual investors.

ESG and Firm Performance: Focusing on the Environmental Strategy

In this study, we investigate whether firms’ eco-friendly strategies affect their value. For the analysis, we study 210 firms in the Republic of Korea. These firms were listed on the Korea Composite Stock Price Index and the Korea Securities Dealers Automated Quotations during 2017–2021. We measure the dependent variable by return on assets, return on equity, and Tobin’s Q as firm value and use the ordinary least square estimation. The results show that firms’ eco-friendly strategies have a positive effect on firm value. Additionally, we examine the effect of eco-friendly strategies on performance by industry and by duration. In the nonservice industry, there is a positive effect of environmental strategy on firm value for a 5-year window, but not for a 3-year window. In the service industry, in contrast, eco-friendly strategies have no effect on firm value for the 5-year window but have positive effects for the 3-year window. In the robustness check, for the endogeneity issue, we perform a two-stage least squares analysis. This study demonstrates that environmental actions are reflected in firm value and that the performance varies by industry. Thus, these results provide critical insights for managers and policy makers who consider the environmental issues of firms.

Real estate risk, yield modelling and market sentiment: the impact on pricing in European office markets

Purpose>The financial and economic turmoil that resulted from the Global Financial Crisis (GFC), included a marked increase in the volatility in real estate markets. Property asset prices were impacted by the real economy and market sentiment, particularly concerning the determination of risk. In an economic downturn, the perception of investment risk becomes increasingly important relative to overall total returns, and thus impacts on yields and performance of assets. In a recovery phase, and particularly within an environment of historically low government bonds, risk and return compete for importance. The aim of this paper is to assess the interrelationships and impacts on pricing between real estate risk, yield modelling outcomes and market sentiment in selective European city office markets.Design/methodology/approach>This paper specifically considers the modelling of commercial property pricing in relation to the appetite for risk in the financial markets. The paper expands on previous work by determining a specific measure of risk pricing in relationship to changing financial market sentiment. The methodology underpinning the research specifically examines the scope for using national and international risk pricing within specific real estate markets in Europe.Findings>This paper addresses whether there is a difference between the impact of risk on the pricing of real estate in international versus regional cities in Europe. The analysis, therefore, determines which city centre office markets in Europe have been most impacted by globalisation including the magnitude on real estate prices and market volatility. The outcome of the paper provides important insights into how changes in risk preferences in the international capital markets have driven and continues to drive yield movements under different market conditions.Research limitations/implications>The paper considers the driving forces which have led to the volatile movements of yields, emanating from the GFC.Practical implications>This paper considers the property market effects on pricing of commercial real estate and the drivers in selected European cities.Originality/value>The outcome of the paper provides important insights into how changes in risk preferences in the international capital markets have driven and continue to drive the yield movements in different real estate markets in Europe.