(Luận văn) psychology factors influencing investment decision and investment performance, a study on individual investors in vietnam

t to Master Thesis ng hi ep w n lo Psychology Factors Influencing Investment ad y th ju Decision and Investment Performance: A Study yi pl on Individual Investors in Vietnam n ua al n va ll fu oi m Ho Minh Phuc at nh Mbus 3.2 z z k jm ht vb Supervisor: Dr Thao P.Tran om l.c gm n a Lu n va y te re th t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th t to ACKNOWLEDGEMENT ng First of all, this thesis appears in its current form due to the assistance and guidance of hi ep several people I would therefore like to offer my sincere thanks to all of them who made this thesis possible and an unforgettable experience for my studying w n Furthermore, I want to express my deep thanks to my supervisor, Dr Tran Phuong Thao for lo ad the trust, the insightful discussion, offering valuable advice, for her support during the whole ju y th period of the study, and especially for her patience and guidance during the time of researching and writing of the thesis process yi pl Besides my supervisor, I would also like to thank the ISB research committee for their al n ua encouragement, insightful comments in my study n support in all aspects of my study va Last but not the least, I would like to thank my family for their material and spiritual ll fu oi m Ho Chi Minh City, December 1st, 2014 at nh HO MINH PHUC z z k jm ht vb om l.c gm n a Lu n va y te re th ` t to December, 2014 ng hi TABLE OF CONTENTS ep ACKNOWLEDGEMENT iii ABSTRACT iii w n LIST OF FIGURE iv lo ad LIST OF TABLE iv y th CHAPTER 1: INTRODUCTION Background of the research 1.2 Problem Statement 1.3 Research Objectives and Questions 1.4 Research Scope .5 1.5 Research Structure ju 1.1 yi pl n ua al va n CHAPTER 2: LITERATURE REVIEW, HYPOTHESES AND CONCEPTUAL MODEL Theoretical background on psychology factors 2.2 An overview of psychology factors on the stock market 11 ll fu 2.1 oi m Overconfidence 12 2.2.2 Excessive Optimism 15 2.2.3 Herding Behavior 17 2.2.4 Risk attitude 19 at nh 2.2.1 z z ht vb Hypotheses development 20 jm 2.3 k 2.3.1 Psychology factors and investment decisions .20 gm 2.3.2 Investment decision and investment performance 23 Conceptual model 25 2.5 Chapter summary 26 om l.c 2.4 a Lu CHAPTER 3: RESEARCH METHODOLOGY .27 Research Process 27 3.2 Research design 28 n 3.1 va n 3.2.1 Questionnaire design: 28 Measurement of variables 29 3.4 Main survey 32 i th Pilot Study .31 y 3.3 te re 3.2.2 ` t to 3.4.1 Sampling 32 ng 3.4.2 Data analysis method 32 hi 3.5 Chapter summary 35 ep CHAPTER 4: EMPIRICAL RESULTS .36 4.1 Data analysis .36 w Reliability Test using Cronbach’s Alpha 39 n 4.2 lo Factor analysis 41 4.4 Testing for regression assumptions .43 ad 4.3 y th ju 4.4.1 Influences of Psychology Factors on the Individual Investment Decision .45 yi 4.4.2 Influences of the investment decision on the Individual Investment Performance 47 pl Chapter summary 49 al 4.5 n ua CHAPTER 5: CONCLUSION, IMPLICATIONS AND DIRECTION FOR FURTHER STUDIES 51 va Key findings of the thesis 51 n 5.2 Managerial Implication of the study 55 fu ll 5.3 Limitation and direction for further studies 56 m Reference .58 oi Questionnaire ( English version) .65 Apendix 4.2 Questionnaire ( Vietnamese version) 70 at nh Apendix 4.1 z Apendix 4.3: Cronbach’s Alpha Test for items of factors 75 z ht vb Apendix 4.4: Factor analysis for psychology variables and investment performance 79 k jm Apendix 4.5: Testing for regression assumptions 81 om l.c gm n a Lu n va y te re th ii ` t to ABSTRACT ng The aim of this thesis is to investigate and determine the relationship between psychology hi ep factors including overconfidence, excessive optimism, herding behavior and risk attitude which influence investment decision and investment performance of the individual investors in w n Vietnam This research model was developed by different author who suggested various lo ad behavioral factors which may affect the investors‟ decision-making process and the investment ju y th performance such as Bondt (1985), Odean (1999), Bikhchandani and Sharma (2001)… Specifically, the thesis employs a survey approach by distributing questionnaire in Ho Chi yi pl Minh City stock exchange Sample size of this research is 200 respondents The 7-point al ua measurements are tested for their consistency and reliability by Factor Analysis and n Cronbach‟s Alpha, which prove that behavioral finance can be used for Vietnam stock market va n The findings indicated that, three of four factors have direct effects on investment decisions, fu ll in which they explained 63.1% of the variance of investment performance of respondents With m oi the method analysis of exploratory factor analysis, the research shows that the strong nh relationship between psychology factors Future researches are encouraged to improve the at z financial knowledge scale to get better and accurate results Despite of some limitations, this z ht vb study also has some significations for individual investors, financial education institutions or k study jm government agency Discussion and implications of the findings are delineated at the end of the om l.c gm n a Lu n va y te re th iii ` t to LIST OF FIGURE ng hi ep Firgure 1.1 The movement of VN Index from 2000 to 6/2014 ……… ……………4 Firgure 2.1: Prospect Theory…………………………………………………………11 w n Firgure 2.2: Conceptual model……………………………………………………… 26 lo ad Firgure 3.1: Conceptual model……………………………………………………… 28 ju y th yi LIST OF TABLE pl ua al n Table 3.3: Cronbach‟s Alpha Reliability Coefficient…………………………… 34 va n Table 4.0: Number of questionnaires of securities companies in Ho Chi Minh City.37 ll fu Table 4.1: Data description ………………………………………………… 38-39 m oi Table 4.2: Cronbach‟s Alpha Test for items of factors 41 nh at Table 4.3: KMO and Bartlett‟s Test 43 z Table 4.4: Factor loadings 44 z ht vb Table 4.5: Correlations ………………………………………………………………45 k jm Table 4.6: Regression testing of psychology factor and the investment decisions… 46 decisions 47 l.c gm Table 4.7: Summary of the relationship between psychological factors and investment om Table 4.8: Regression testing of investment decisions and investment performance 49 a Lu Table 4.9: Summary of the relationship between investment decision and investment n performance……………………………………………………………………………50 n va y te re th iv ` t to CHAPTER 1: INTRODUCTION ng hi This chapter introduces the background of the behavior finance as well as the status of ep psychology factors After that, problem statement is discussed in Vietnamese stock market to have the general picture about the stock market The research questions and objectives are w n proposed to explore the factors determining investment decision and investment performance lo ad Based on these, research scope is proposed and thesis structure is presented y th ju 1.1 Background of the research yi pl Theories of human behavior from psychology, sociology, and anthropology have motivated ua al much recent empirical research on the behavior of financial markets They attempts to explain n human behaviors‟ in markets, importing theories of human behavior from the social sciences va (Shiller, 1999) to explain why and how financial markets might be inefficient (Sewell, 2007) n ll fu It could be seen that the term “behavioral finance” has been emerged since 1896 when le oi m Bon (1896) wrote a book “The Crowd: A Study of the Popular Mind” It is one of the greatest at nh and most influential books of social psychology ever written Later, the second-most cited z paper ever to appear in Econometrical in 1979, the prestigious academic journal of economics, z vb was written by two psychologists Kahneman and Tversky who proposed the prospect theory jm ht (Kahneman and Tversky 1979) Then, Plous (1993) wrote The Psychology of Judgment and Decision Making which gives a comprehensive introduction to the field with a strong focus on k gm the social aspects of decision making processes om l.c A wide range of behavior is taken into account when investigating investor psychology in finance Tversky and Kahneman (1994) confirmed a distinctive fourfold pattern of risk a Lu attitudes: risk aversion for gains and risk seeking for losses of high probability; risk seeking for n va gains and risk aversion for losses of low probability Later, Odean (1999) demonstrated that n overall trading volume in equity markets is excessive, and one possible explanation is th has established that men are more prone to overconfidence than women (especially in male- y stocks being sold too soon and losing stocks being held for too long Psychological research te re overconfidence He also found evidence of the disposition effect which leads to profitable ` t to dominated areas such as finance) whilst theoretical models predict that overconfident investors ng trade excessively Barber and Odean (2001) found that men trade 45 percent more than women hi ep and thereby reduce their returns more so than women and conclude that this is due to overconfidence w n In recent years, behavioral finance issues are widely studying Under the light of lo ad behavioral finance, investors can be affected by psychological factors (emotional and cognitive y th factors) which are the so-called behavioral biases in their decision-making process Behavioral ju biases are abstractly defined the same way as systematic errors in judgment (Pompian, 2006) yi pl In fact, many phenomenon and individual investor‟s behaviors in the Vietnamese stock market ua al cannot be explained by standard finance, which based on the efficient market hypothesis n Through the studies, it is found that there are a great number of psychological factors having a va n significant influence on the behavior of investors Among them, four common psychological fu ll factors that exist in almost every human being are (1) overconfidence, (2) excessive optimism, m oi (3) attitude towards risk and (4) herd behavior Up to now, there have been numerous studies at nh related to these above psychological forms of individual investors in the world such as as z Debond (1985), Odean (1999); Bikhchandani and Sharma (2001) z ht vb A study by Lakonishok, Shleifer and Vishny (1994) postulate that value strategies produce jm superior returns because of investors consistently overestimate future growth rates of glamour k stocks relative to value stocks The essence of this argument is that investors are excessively gm optimistic about value (glamour) stocks because they tie their expectations of future growth in om l.c earnings to past bad (good) earnings Prior studies shows that behavioral finance studies have been carried out popularly in a Lu developed markets of Europe and the United States (Caparrelli, Arcangelis & Cassuto, 2004, n n va p.222–230) as well as in emerging and frontier markets (Lai, 2001, p.210–215 ; Waweru et al., developed markets while using behavioral finance for frontier and emerging markets is much y te re 2008, p.24-41) Among these studies, Odean (2001) indicates behavior factors existing in factors particularly psychology factors are important in emerging markets like Vietnam th fewer than for developed markets (Waweru et al., 2008) As such, understanding behavioral ` t to With the development of the science, technology and the economy, it is possible to consider ng stock market as the yardstick for economic strength and development Therefore, the hi ep movement of stock market trend represents the economic health of an economy The development of theories and models is try to attempt and explain the way how stock price goes w n up and down From the developed stock markets such as the USA, the UK, Japan which have lo ad strong impacts on global security markets (Reza, Zamri & Tajul, 2009) to the emerging and the y th frontier or pre emerging such as Vietnam, Kenya, the psychology of human being is ju complicated and cannot be predicted From that, researchers and investors show that to yi pl understand people‟ activities and behavior or psychology factors is necessary n ua al 1.2 Problem Statement n va In Vietnam, there are two stock exchanges The first Vietnamese stock exchange, known as ll fu the Ho Chi Minh Stock Trading Center (HOSTC) has been launched since 2000 and the oi m second, known as the Ha Noi Stock Trading Center (HASTC) has been established since 2005 At the beginning, the market size was quite small and thin with only listed companies and nh at security companies; however, the market has been developed significantly in recent years By z December 2013, there were more than 300 listed companies on the Ho Chi Minh Stock z vb Exchange (HOSE), the later name of the HOSTC, with market value was 949,000 billion VND, ht jm increased 184,000 billion VND in comparison with 2012, accounting for approximately 31% k GDP In addition, the second stock Exchange also had significant growth as given in Huong l.c gm (2014) om Between the two markets, the Ho Chi Minh stock market has been developed significantly a Lu in the number of listed stocks and transaction value for 14 years (Mieu, 2014), the price n movement seems to fluctuate unpredictably over different periods (Graph 1.1) However, this y te re (2007) n va market index is often used for doing research and studying in Vietnam such as Ly (2010), Chi th ` Disagre Neutral Agree Highly Extremel y Disagre e Agree y Disagree e Agree                                             ng Highly fu t to Extremel hi ep Constr Items uct w n Investors like big lo price fluctuation to ad get the high profit y th ju Investors like to yi invest the companies pl which they knows down, the investors  ll often keep the stocks n m longer to wait the oi e va attitud n Risk ua When price goes al clearly at nh price go up Investors like to z ht vb which have the stable z invest the companies k jm dividend stocks has a high gm Our investment in om Our investment has va n Our investment has a lower risk compared  y th to the market in te re ns  n interest payment ment Decisio a Lu the ability to meet  l.c degree of safety Invest  general 68 ` t to III YOUR INVESTMENT PERFORMANCE ng hi ep Highly Disagre Neutral Agree Highly Extremel y Disagre e Agree y Disagree e Agree                 Extremel w lo Items ad uct n Constr y th The return rate of ju yi your recent stock pl investment meets n ua Your rate of return is al your expectation  ll average return rate of oi m ment higher than the fu Invest n va recently equal to or the market You feel satisfied at mance nh perfor z with your investment z     k jm selling, buying, ht many years (including vb decisions in the last deciding the stock om l.c volumes) gm choosing stocks, and n a Lu n va y te re th 69 ` t to ng Apendix 4.2 Questionnaire ( Vietnamese version) hi ep PHIẾU PHỎNG VẤN NHÀ ĐẦU TƯ CÁ NHÂN VỀ CÁC NHÂN TỐ TÁC ĐỘNG ĐẾN QUYẾT ĐỊNH ĐẦU TƯ VÀ THÀNH QUẢ ĐẦU TƯ w n Kính gửi: Anh/Chị lo ad Tơi sinh viên cao học Viện Đào Tạo Quốc Tế - Trường Đại Học Kinh Tế TPHCM y th Hiện làm luận văn tốt nghiệp đề tài: “ Nghiên cứu nhân tố tâm lý tác động ju yi đến định đầu tư thành đầu tư – Một nghiên cứu thực nghiệm thị trường chứng pl khốn Việt Nam” Chính tơi mong Anh/Chị với tư cách nhà đầu tư cá nhân đưa al n ua quan điểm thơng qua bảng câu hỏi đính kèm n va Tất liệu tổng hợp giữ kín, trình bày hình thức báo cáo tổng ll fu hợp, thông tin cá nhân không bị tiết lộ m at Nữ  Nam  nh Giới tính oi I Thơng tin cá nhân z Tuổi z 36 – 45  46 – 55  Over 55  k jm ht 26 – 35  vb 18 - 25  gm Tình trạng nhân: Độc thân  Đã kết hôn  Ly dị  Trung học thấp  Cao đẳng, trung cấp  Cử nhân a Lu om l.c Học Vấn Thạc sĩ  Tiến sĩ  Khác   n n va y te re th Thời gian đầu tư chứng khoán 70 ` t to ng Dưới năm – 10 năm   50- 200 triệu   500 triệu – tỷ    Trên tỷ  hi Trên 10 năm ep Số tiền đầu tư năm ngoái (VND) w n lo ad ju y th Dưới 50 triệu yi 200 – 500 triệu pl n ua al CÁC YẾU TỐ TÂM LÝ ẢNH HƯỞNG ĐẾN QUYẾT ĐỊNH ĐẦU TƯ n va II không oi không đồng ý đồng ý Không Trung Đồng Rất Hồn đồng hịa ý đồng ý tồn z    vb jm ht                    k   om động đầu tư l.c gm Anh/chị tin hồn Q tự  người khác tồn kiểm soát hành z Anh/chị tin chọn lựa tốt cổ phiếu đồng ý ý at nh Biến đo lường Yếu tố Rất m toàn ll fu Hoàn Hầu hết nhà đầu tư thành n a Lu tin  n va công dựa kỹ  họ  y th thị trường te re Anh/chị tin hiểu rõ 71 ` t to ng hi ep Biến đo lường w Yếu tố Hồn Rất Khơng Trung Đồng Rất Hồn tồn khơng đồng hịa ý đồng ý tồn khơng đồng ý đồng ý đồng ý ý n lo Anh/chị tiếp tục đầu tư ad thị trường xu hướng                                  ju y th xuống  Anh/chị bỏ thêm vốn đầu quan tư vào thị trường thái Anh/chị tin xu hướng thị trường lên vào yi Lạc pl n ua al oi nh   z          om        z vb bầy đàn có ảnh hưởng đến định at Quyết định nhà đầu tư Hành vi khác việc chọn cổ phiếu m  ll fu thị trường phục hồi n Nếu VNIndex giảm 4%, va năm tới jm ht anh/chị theo thơng tin l.c gm so với thị trường, anh/chị k Nếu anh/chị có thơng tin khác Anh/chị có nhìn vào khối  n bầy đàn Anh/chị có thường thay đổi va n nhanh chóng định đầu  te re tư theo phản ứng thị  a Lu Hành vi lượng giao dịch để đầu tư y trường th 72 ` t to ng hi ep Biến đo lường w Yếu tố Hồn Rất Khơng Trung Đồng Rất Hồn tồn khơng đồng hịa ý đồng ý tồn khơng đồng ý đồng ý đồng ý ý      n lo Anh/chị có thích biến động ad mạnh giá để kiếm lợi nhuận rủi ro Anh/chị đầu tư vào công                      ju y th Thái độ yi pl ty mà hiểu rõ al rủi ro Anh/chị thích đầu tư vào  oi        vb Quyết định đầu tư anh/chị k jm có bù đắp lãi suất thị ht trường Quyết định đầu tư anh/chị n n va III THÀNH QUẢ ĐẦU TƯ CỦA ANH CHỊ DỰA TRÊN QUYẾT ĐỊNH ĐẦU TƯ  a Lu trường  om có rủi ro thấp so với thị l.c gm đầu tư z định z  thị trường Quyết at nh Quyết định đầu tư anh/chị mang tính an tồn cao so với m công ty chia cổ tức ll bán fu n giữ cổ phiếu dài hạn hay va Thái độ n ua Khi thị trường xuống, anh/chị y te re th 73 ` t to ng hi ep Hồn Rất Khơng tồn khơng đồng khơng đồng ý đồng ý hịa ý Rất Hoàn đồng toàn ý đồng ý ý Biến đo lường w Yếu tố Trung Đồng n lo Mức sinh lợi ad năm vừa qua có đáp ứng y th với kỳ vọng anh/chị             Rất Khơng Rất Hồn khơng đồng đồng toàn ý đồng ý mong muốn yi pl đầu tư  ju Thành  Mức sinh lợi anh/chị al ua năm qua cao n mức sinh lợi trung bình n va thị trường fu ll Hoàn jm       om l.c lượng giao dịch)  gm chọn cổ phiếu khối k qua ( bao gồm mua bán, ht đầu tư vb định đầu tư năm z Anh/chị cảm thấy hài lòng Thành ý z Biến đo lường hòa ý at Yếu tố đồng ý nh đồng ý oi khơng m tồn Trung Đồng n a Lu n va y te re th 74 ` t to ng hi ep Apendix 4.3: Cronbach’s Alpha Test for items of factors w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 75 ` t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 76 ` t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 77 ` t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 78 ` t to Apendix 4.4: Factor analysis for psychology variables and investment performance ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 79 ` t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 80 ` t to Apendix 4.5: Testing for regression assumptions ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 81 ` t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 82