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The Lottery Mindset: Investors, Gambling and the Stock Market

  • Book
  • © 2014

Overview

Authors:
  1. Wai Mun Fong

    1. National University of Singapore, Singapore

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Table of contents (8 chapters)

  1. Front Matter

    Pages i-xiv
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  2. A Survey of Behavioral Finance

    • Wai Mun Fong
    Pages 1-24

  3. Overtrading

    • Wai Mun Fong
    Pages 25-45

  4. Trend-Chasing

    • Wai Mun Fong
    Pages 46-76

  5. Growth Stocks

    • Wai Mun Fong
    Pages 77-100

  6. The Beta Anomaly

    • Wai Mun Fong
    Pages 101-121

  7. The IVOL Puzzle

    • Wai Mun Fong
    Pages 122-137

  8. The MAX Effect

    • Wai Mun Fong
    Pages 138-155

  9. Conclusion

    • Wai Mun Fong
    Pages 156-158

  10. Back Matter

    Pages 159-183
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Keywords

About this book

Financial markets are growing in complexity, and there is an increased risk that investors are led to investment products and strategies they do not fully understand. The crisis-ridden decade of the 2000s is a stark reminder of how poorly managed finances can wreak havoc on household finances. Traditional finance assumes that all investors are risk-averse and require a risk premium from investing in risky assets such as stocks. However, recent developments in behavioural finance show that many individual investors often adopt strategies that lead to serious investment missteps, including over-investing in lottery-type stocks and securities. Lottery-type securities in fact attract investors who may be risk-seeking or are strongly influenced by cognitive biases ranging from overconfidence to being over-optimistic about future investment returns, especially during periods of high sentiment. Drawing on existing and new research, The Lottery Mindset summarizes the behavioural motivations and detrimental impact of investment strategies which are popular with individual investors. Wai-Mun Fong provides insight and guidance on behavioural biases, and successful investment. By both reviewing and contributing to exiting literature on this topic, this book will be of use to academics and general readers alike.

Authors and Affiliations

  • National University of Singapore, Singapore

    Wai Mun Fong

About the author

Wai-Mun Fong is Associate Professor at the NUS Business School, National University of Singapore, where he teaches Personal and Corporate Finance and Wealth Management to PhD, MSc and Undergraduate level students. He obtained his PhD in Financial Economics from the University of Manchester in 1992, and has since contributed to and authored various financial books and journals. His main areas of research include empirical asset pricing, investment strategies, personal finance and behavioural finance.

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