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Investor Sentiment - Theoretical Aspects And Practical Conclusions, In The Context Of The Pandemic Crisis

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  • Anca Ioana, Iacob (Troto)

    (University of Craiova)

Abstract

In the current context of the health crisis of 2020, in which financial analysts and researchers foresee an economic and financial crisis that will follow, this work analyses the subject of the psychology of participants in financial market mechanisms, as a determining factor of their evolution. Financial market reviews should not overlook the emotional component of the stock market functioning. Market sentiment plays an important role in the evolution of stock market volatility and can significantly influence registered indices in a positive or negative sense. This theoretical study of investor sentiment is a conceptual foundation of the economic reality we live in. Based on a concatenation of the aspects that researchers have expressed in their scientific researches, this study concludes by determining causal factors of the parallel evolution of market sentiment and economic growth. At the same time, the aim of the study is to draw the attention regarding the implications that an enhancement of investors' sentiment may have on the deepening of the decline of financial markets. In the context of the Covid-19 crisis, the study's conclusion is a recommendation to investors for rational balance and caution in the basis of decisions.

Suggested Citation

  • Anca Ioana, Iacob (Troto), 2021. "Investor Sentiment - Theoretical Aspects And Practical Conclusions, In The Context Of The Pandemic Crisis," Management Strategies Journal, Constantin Brancoveanu University, vol. 51(1), pages 122-128.
    • Handle: RePEc:brc:journl:v:51:y:2021:i:1:p:122-128
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    References listed on IDEAS

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    More about this item

    Keywords

    investor sentiment; cyclicity of the economy; market sentiment;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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