Int. J. Behavioural Accounting and Finance, Vol. 5, No. 2, 2015 175
Copyright © 2015 Inderscience Enterprises Ltd.
Individual psychology and investment style
Lucy F. Ackert*
Department of Economics and Finance
Michael J. Coles College of Business,
Kennesaw State University,
1000 Chastain Road, Kennesaw, GA 30144, USA
Fax: (470) 578-9022
Email: lackert@kennesaw.edu
*Corresponding author
George Athanassakos
Ben Graham Chair in Value Investing,
Richard Ivey School of Business,
University of Western Ontario,
1151 Richmond Street North,
London, Ontario, Canada N5X 4P4
Fax: (519) 661-3485
Email: gathanassakos@ivey.uwo.ca
Bryan K. Church
Scheller College of Business,
Georgia Tech.,
800 West Peachtree Street,
Atlanta, GA 30308-0520, USA
Fax: (404) 894-6030
Email: bryan.church@scheller.gatech.edu
Abstract: This paper sheds light on the individual characteristics associated
with investment style. A vast literature documents the importance of individual
personality in explaining variation in choice, yet many questions remain
regarding the determinants of investment choices. We use an experimental
method to isolate participants’ preference for value vs. growth stocks. Recent
research suggests that biology plays a significant role in determining
investment style. We extend this research by examining whether measurable
behavioural and personality factors predict investment style, including
risk tolerance, time preference, overconfidence, personal evaluation of the
investment opportunity, and character strengths. Importantly, we find that an
individuals’ personal affective assessment of an investment opportunity plays
a significant role in the determination of investor style.
Keywords: value investing; investment style; cognitive bias.