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Investor-advisor Big Five personality similarity and stock trading performance

Author

Listed:
  • Muhammad Zubair Tauni

    (Zhejiang University [Hangzhou, China])

  • Salman Yousaf

    (School of Management. Fudan University)

  • Tanveer Ahsan

    (ESC [Rennes] - ESC Rennes School of Business)

Abstract

The purpose of this study is to investigate how investor-advisor similarities (differences) in Big Five personality are related to stock trading performance. We used an online survey questionnaire to collect data from 314 investor-advisor dyads in the Chinese stock market. Personality similarity (difference) between investor and advisor was determined using "difference score analysis". The results showed that investor-advisor similarity in terms of openness, extraversion, conscientiousness, and agreeableness is positively related to investor stock trading performance. On the other hand, the investor-advisor similarity in neuroticism negatively affects investor trading performance. Further analysis also showed that investor-advisor similarity in demographics such as gender and education is related to stock trading performance. This research posits that retail investors show different trading performances if their personalities and demographics match (mismatch) with their advisors. Therefore, the patterns of investors' trading performance can be jointly explained by both investors' endogenous as well as exogenous factors.

Suggested Citation

  • Muhammad Zubair Tauni & Salman Yousaf & Tanveer Ahsan, 2020. "Investor-advisor Big Five personality similarity and stock trading performance," Post-Print hal-02459823, HAL.
    • Handle: RePEc:hal:journl:hal-02459823
    DOI: 10.1016/j.jbusres.2019.10.055
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    Citations

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    Cited by:

    1. Brooks, Chris & Williams, Louis, 2022. "When it comes to the crunch: Retail investor decision-making during periods of market volatility," International Review of Financial Analysis, Elsevier, vol. 80(C).
    2. Kamini Rai & Abha Gupta & Anshu Tyagi, 2021. "Personality Traits Leads to Investor’s Financial Risk Tolerance: A Structural Equation Modelling Approach," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 46(4), pages 422-437, November.
    3. Cynthia Pagliaro & Dhagash Mehta & Han-Tai Shiao & Shaofei Wang & Luwei Xiong, 2021. "Investor Behavior Modeling by Analyzing Financial Advisor Notes: A Machine Learning Perspective," Papers 2107.05592, arXiv.org.
    4. Brooks, Chris & Williams, Louis, 2021. "The impact of personality traits on attitude to financial risk," Research in International Business and Finance, Elsevier, vol. 58(C).
    5. Abdelmoety, Ziad Hassan & Aboul-Dahab, Sameh & Agag, Gomaa, 2022. "A cross cultural investigation of retailers commitment to CSR and customer citizenship behaviour: The role of ethical standard and value relevance," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    6. Wasim ul Rehman & Omur Saltik & Faryal Jalil & Suleyman Degirmen, 2024. "Viral decisions: unmasking the impact of COVID-19 info and behavioral quirks on investment choices," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-20, December.
    7. Yogita Singh & Mohd. Adil & S. M. Imamul Haque, 2023. "Personality traits and behaviour biases: the moderating role of risk-tolerance," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(4), pages 3549-3573, August.
    8. Ali, Fayaz & Tauni, Muhammad Zubair & Ali, Ayaz, 2022. "The Big Five dyad congruence and compulsive buying: A case of service encounters," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    9. M. G. Ceravolo & V. Farina & L. Fattobene & L. Leonelli & G. Raggetti, 2021. "Gender-Related Variability in Information Processing of Disclosure Documents," Journal of Consumer Policy, Springer, vol. 44(2), pages 217-233, June.

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