The role of emotions arising from instability in investment behaviour / El papel de la carga emocional de la inestabilidad en el comportamiento de inversión

Abstract

Clear empirical evidence has been found on how significant changes to a person’s environment can alter their behaviour. This is important when considering investments made on the stock exchange as the variations that occur in stock market prices are frequent and continuous. This study analyses the role instability has on individual investors’ behaviour when investing in the stock market. The results suggest that instability in investment situations plays a significant role in individual investors’ behaviour, probably due to the emotional effect provoked by the possibility of suddenly losing savings. This would modify the perception investors have about investing as well as their intentions, attitudes and feelings of control in regards to investment in financial markets, thus hindering the capacity to predict their behaviour.