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Attention-grabbing stocks and the behavior of individual investors in Brazil

Brazilian Review of Finance

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Field Value
 
Title Attention-grabbing stocks and the behavior of individual investors in Brazil
 
Creator Chague, Fernando
Giovannetti, Bruno
Silva, Anthony
 
Subject Financial Economics; Behavioral Finance
attention-grabbing stocks; behavioral bias; news
G12; G40; G41
 
Description This study complements the existing literature on investor attention with three empirical findings. First, we show that low-activity individual investors are net buyers of stocks appearing on the headlines of news stories that convey no meaningful information about future returns. Second, we document that this buying pressure of some individuals following purely attention-grabbing articles leads to higher short-term returns. Finally, we provide evidence that investors who are more prone to purchase stocks after irrelevant news have poorer stock-picking performance. We hypothesize that individuals tend to narrow their choice set to alternatives that attract attention. Taken together, our findings suggest that the media, just by making some firms more salient, plays an important role in the allocation of individual investors' attention in investment activities.
 
Publisher Lociedade Brasileira de Finanças
 
Contributor —
 
Date 2020-05-17
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Double blind reviewed articles
Empirical
Avaliado por Pares
 
Format application/pdf
 
Identifier http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/81490
10.12660/rbfin.v18n1.2020.81490
 
Source Brazilian Review of Finance; Vol 18, No 1 (2020): January-March; 1-22
Revista Brasileira de Finanças; Vol 18, No 1 (2020): January-March; 1-22
1984-5146
1679-0731
 
Language eng
 
Relation http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/81490/77801
 
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