Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity market
The empirical evidence in the developed equity markets such as the United States, the United Kingdom, Germany, Japan and emerging markets had pronounced that there are institutional and individual investors’ cognitive psychology and mental biases in favor of the Growth Stocks, that is, the Growth St...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2018-09-01
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| Series: | Investment Management & Financial Innovations |
| Subjects: | |
| Online Access: | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/10876/imfi_2018_03_Akinde.pdf |
| _version_ | 1826909672838266880 |
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| author | Mukail Aremu Akinde Eriki Peter Ochei Ailemen Ikpefan |
| author_facet | Mukail Aremu Akinde Eriki Peter Ochei Ailemen Ikpefan |
| author_sort | Mukail Aremu Akinde |
| collection | DOAJ |
| description | The empirical evidence in the developed equity markets such as the United States, the United Kingdom, Germany, Japan and emerging markets had pronounced that there are institutional and individual investors’ cognitive psychology and mental biases in favor of the Growth Stocks, that is, the Growth Stocks are always preferred to the Value Stocks by the investors. The investors most times prefer the Growth Stocks to the Value Stocks irrespective of the stock fundamentals behavior in the equity market. The paper investigated whether Cognitive Psychology and Mental biases affect Portfolio Selection strategies using the Growth or the Value Stocks investment styles in the Nigerian Stock Market. In the study, the summary of the primary data was described and Multinomial Logistic Regression (MLR) models were adopted to make inferential decisions. The paper collected primary data through questionnaire administered to individual and institutional investors on the floor of Nigeria Stock Exchange (NSE). The findings from the analyses conducted confirmed a strong existence of Cognitive Psychology and mental biases in favor of the Growth Stocks in the Nigerian Equity Market. Investors had more belief in Growth Stocks than the Value Stocks notwithstanding the behavior of the market fundamentals. The study recommended that investors should seriously consider occurrences and performance fundamentals in Portfolio Selection in the Nigerian Equity Market. |
| first_indexed | 2024-12-18T23:51:13Z |
| format | Article |
| id | doaj.art-0a2a8081778f4fd5821bd8582f0e098b |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2025-02-17T09:46:34Z |
| publishDate | 2018-09-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-0a2a8081778f4fd5821bd8582f0e098b2025-01-02T06:50:34ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582018-09-0115326728210.21511/imfi.15(3).2018.2210876Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity marketMukail Aremu Akinde0Eriki Peter1Ochei Ailemen Ikpefan2Ph.D. Student in Finance, Covenant University, Ota, Ogun State Visiting Professor of Finance, Covenant University, Ota, Ogun State (University of Benin)Professor of Finance, Covenant University, Ota, Ogun StateThe empirical evidence in the developed equity markets such as the United States, the United Kingdom, Germany, Japan and emerging markets had pronounced that there are institutional and individual investors’ cognitive psychology and mental biases in favor of the Growth Stocks, that is, the Growth Stocks are always preferred to the Value Stocks by the investors. The investors most times prefer the Growth Stocks to the Value Stocks irrespective of the stock fundamentals behavior in the equity market. The paper investigated whether Cognitive Psychology and Mental biases affect Portfolio Selection strategies using the Growth or the Value Stocks investment styles in the Nigerian Stock Market. In the study, the summary of the primary data was described and Multinomial Logistic Regression (MLR) models were adopted to make inferential decisions. The paper collected primary data through questionnaire administered to individual and institutional investors on the floor of Nigeria Stock Exchange (NSE). The findings from the analyses conducted confirmed a strong existence of Cognitive Psychology and mental biases in favor of the Growth Stocks in the Nigerian Equity Market. Investors had more belief in Growth Stocks than the Value Stocks notwithstanding the behavior of the market fundamentals. The study recommended that investors should seriously consider occurrences and performance fundamentals in Portfolio Selection in the Nigerian Equity Market.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/10876/imfi_2018_03_Akinde.pdfcognitive psychologygrowth stocksinvestment stylesmental biasesportfolio selectionvalue stocks |
| spellingShingle | Mukail Aremu Akinde Eriki Peter Ochei Ailemen Ikpefan Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity market Investment Management & Financial Innovations cognitive psychology growth stocks investment styles mental biases portfolio selection value stocks |
| title | Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity market |
| title_full | Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity market |
| title_fullStr | Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity market |
| title_full_unstemmed | Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity market |
| title_short | Portfolio selection strategies and cognitive psychology biases: a behavioral evidence from the Nigerian equity market |
| title_sort | portfolio selection strategies and cognitive psychology biases a behavioral evidence from the nigerian equity market |
| topic | cognitive psychology growth stocks investment styles mental biases portfolio selection value stocks |
| url | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/10876/imfi_2018_03_Akinde.pdf |
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