Information, Overconfidence and Trading: Do the Sources of Information Matter?

We investigate how the strength of the positive association between frequency of trading and information acquisition is dependent on investors’ self-confidence and on the sources of information used by investors. Our results confirm that the more frequently individual investors invest in information, the more they trade in financial products. Our results also confirm previous findings that overconfident investors, who show a better than average bias, trade more frequently. In this paper, we add to this literature by investigating if the strong and positive relationship between investment in information and intensity of trading in financial assets is sensitive to the sources of information used by investors, and if this influence is different for overconfident and non-overconfident investors. We conclude that overconfident investors trade more frequently when they collect information directly using specialized sources and that nonoverconfident investors trade less frequently when they use professional advice from the bank/account manager.Information, overconfidence, investor behaviour, trading, sources of information Classification-G11, G14, D83

The disposition effect among mutual fund participants : a re- examination

Using information on mutual fund trades executed from 1998 to 2017 by 31,513 individual investor clients of a major Portuguese financial institution, we study the relationship between the disposition effect, financial literacy and trading experience. We find that mutual fund investors exhibit strong disposition effect. The tendency to hold losers is partially offset with literacy: not only holding a university degree reduces the propensity to hold on to loser funds but also higher financial knowledge and stronger math skills reduce the disposition effect. Literacy also plays a role in shaping the way experience affects this bias. Evidence of the disposition effect persists after accounting for redemption fees, bad emotions, irrational beliefs, market sentiment and the existence of someone to blame.info:eu-repo/semantics/publishedVersio

Are mutual fund investors in jail?

The absence of investor reaction to the poor performance of mutual funds is a widely reported phenomenon. This paper investigates the role of load costs as an explanation for the phenomenon and concludes that back-end load fees are an obstacle to reaction. We find that investors with a high likelihood of undergoing a liquidity crisis, preferring liquidity in decision making, act contrary to the reaction hypothesis, and investors with broader investment horizons do not react to poor performances due to the fact that they are “imprisoned” by back-end load fees.Mutual Fund, Performance Reaction, Load Costs, Investor Behaviour

Mutual fund flows’ performance reaction: does convexity apply to small markets?

In this paper we study the performance reaction of investors in a small market context. Instead of the asymmetrical investors’ reaction to winners and losers, as usually documented for the US, an absence of risk-adjusted performance reaction was observed. The absence of reaction can be attributed to either lower investor sophistication, conflicts of interests in the context of the Portuguese universal banking industry, or the existence of relevant back-end load cost which prevent investors from reacting. A high persistence of net investment flows was also noted. Our results are consistent with the idea that the financial groups with larger market shares have the capacity “to drive” their customers to funds with larger fees. This practice emerges as a non-transparent means of increasing prices.Mutual Funds, Performance Reaction, Investor Behaviour, Small Markets and Regulation

Who cares about sustainable investments?

This paper aims to identify which characteristics of individuals, investors or not, lead them to prioritize sustainability over profitability. It also assesses the impact of the sources and types of information used and the impact of non-economic factors on the decision-making of (non-)investors. I conclude that the sensitivity of Portuguese individuals to sustainability issues differs between investors and non-investors, not only with regard to the sources used, but also with regard to the topics on which they look for information. However, as far as values and attitudes are concerned, the results are very similar for investors and non-investors

Simulation of OWES with five-Level converter linked to the grid: Harmonic assessment

This paper deals with a computing simulation for an offshore wind energy system taking into account the influence of the marine waves action throughout the floating platform. The wind energy system has a variable-speed turbine equipped with a permanent magnet synchronous generator and a full-power five level converter, injecting energy into the electric grid through a high voltage alternate current link. A reduction on the unbalance of the voltage in the DC-link capacitors of the five-level converter is proposed by a strategic selection of the output voltage vectors. The model for the drive train of the wind energy system is a two mass model, including the dynamics of the floating platform. A case study is presented and the assessment of the quality of the energy injected into the electric grid is discussed.Fundação para a Ciência e Tecnologia (FCT) under the: project LAETA 2015‐2020, reference UID/EMS/50022/2013; FCT Research Unit nº 151 C‐MAST Center for Mechanical and Aerospace Sciences and Technolog

Simulation of a rectifier malfunction on a offshore wind system with HVDC transmission

A new integrated mathematical model for the simulation of an offshore wind system having a rectifier input voltage malfunction at one phase is presented in this paper. The mathematical model considers an offshore variable-speed wind turbine on a floating platform, equipped with a permanent magnet synchronous generator using full-power three-level converter to inject energy into the electric network, through a high voltage direct current transmission submarine cable. The model for the drive train is a discrete three mass, incorporating the dynamic of the moving surface. A case study is presented to access conclusion about the malfunction.Fundação Ciência e Tecnologia, through IDMEC/LAETA, Instituto Superior Técnico, Universidade de Lisbo

HVDC Power Transmission Simulation for Offshore Wind System with Three-Level Converter

An integrated mathematical model for the simulation of an offshore wind system performance is presented in this paper. The mathematical model considers an offshore variable-speed turbine in deep water equipped with a permanent magnet synchronous generator using multiple point full-power clamped three-level converter, converting the energy of a variable frequency source in injected energy into the electric network with constant frequency, through a HVDC transmission submarine cable. The mathematical model for the drive train is a concentrate two mass model which incorporates the dynamic for the blades of the wind turbine, tower and generator due to the need to emulate the effects of the wind and the floating motion. Controller strategy considered is a proportional integral one. Also, pulse width modulation using space vector modulation supplemented with sliding mode is used for trigger the transistors of the converter. Finally, a case study is presented to access the system performance

Home Country Bias: Does Domestic Experience Help Investors Enter Foreign Markets?

This paper investigates whether investors' domestic experience helps them enter foreign markets. We show that investors first invest in domestic securities and only some time later they invest abroad in foreign securities. We also show that investors who trade more often in the domestic market start to invest abroad earlier. Our findings suggest that the experience investors acquire while they trade in the domestic market is a key reason why active investors enter the foreign market earlier. A reason is that highly educated investors as well as investors with more financial knowledge, arguably those for whom learning by trading is the least important, do not need to trade as much in the domestic market before they start investing in foreign securities. Another reason is that investors who start investing in foreign securities are able to improve on their performance afterwards. This improvement in performance constitutes further evidence that the home country bias is costly, thereby confirming that there are gains for investors from investing abroad.Learning, home country bias, duration analysis.