Document Type
Thesis
First Faculty Advisor
A. Can Inci
Second Faculty Advisor
Jeffrey Koplik
Keywords
investment behavior; financial literacy; individual investor; professional investor
Publisher
Bryant University
Rights Management
CC - BY
Abstract
In the modern world, there is greater accessibility to information and investment opportunities. This has led to more people from many different backgrounds to start investing in various markets. Because of this, the modem-day investor can look like many different things and have significantly varied levels of financial knowledge. This study will look into the differences in investment behaviors for individual investors, who typically have lower financial literacy rates, and professional investors, who typically have higher financial literacy rates. The data will be obtained by surveying individuals with various financial literacy rates in order to gauge the differences between individual investors and professional investors by creating proxies for the two groups based on financial intelligence scores. The surveys consist of questions that test financial literacy, as well as their investment behaviors such as diversification, risk tolerance, and so on. The data is then analyzed to find commonalities in investment behaviors among the two proxy groups. Based on the findings of the research, commonalities, and differences between the two groups, investment behaviors are explored. The analysis shows some behaviors, such as each groups level of temperament are similar, while other behaviors, such as preferences for asset class selection, appear different between the two groups.
Comments
The thesis was made mostly due to a curiosity of whether professional investors behaviors are truly different from individual investors behaviors.