Do Happy People Make Optimistic Investors?

Citation

Kaplanski G, Levy H, Veld C & Veld-Merkoulova YV (2013) Do Happy People Make Optimistic Investors?. SSRN Working Paper Series, 2009319. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2009319

Abstract
Do happy people predict future risk and return differently from unhappy people, or do individuals rely only on economic facts? We survey investors on their subjective sentiment-creating factors, return and risk expectations, and investment plans. We find that non-economic factors systematically affect return and risk expectations, where the return effect is more profound. Investment plans are also affected by non-economic factors. Sports results and general feelings significantly affect predictions. Sufferers from seasonal affective disorder have lower return expectations in the autumn than in other seasons, supporting the Winter Blues hypothesis.

Keywords
sentiment-creating factors; sentiments; individual investors; mood; seasonal affective disorder