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The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States
A highly transmittable and pathogenic viral infection, COVID-19, has dramatically changed the world with a tragically large number of human lives being lost. The epidemic has created psychological resilience and unbearable psychological pressure among patients and health professionals. The objective...
Autores principales: | , , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Frontiers Media S.A.
2021
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7902781/ https://www.ncbi.nlm.nih.gov/pubmed/33643158 http://dx.doi.org/10.3389/fpsyg.2021.626934 |
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author | Naseem, Sobia Mohsin, Muhammad Hui, Wang Liyan, Geng Penglai, Kun |
author_facet | Naseem, Sobia Mohsin, Muhammad Hui, Wang Liyan, Geng Penglai, Kun |
author_sort | Naseem, Sobia |
collection | PubMed |
description | A highly transmittable and pathogenic viral infection, COVID-19, has dramatically changed the world with a tragically large number of human lives being lost. The epidemic has created psychological resilience and unbearable psychological pressure among patients and health professionals. The objective of this study is to analyze investor psychology and stock market behavior during COVID-19. The psychological behavior of investors, whether positive or negative, toward the stock market can change the picture of the economy. This research explores Shanghai, Nikkei 225, and Dow Jones stock markets from January 20, 2020, to April 27, 2020, by employing principal component analysis. The results showed that investor psychology was negatively related to three selected stock markets under psychological resilience and pandemic pressure. The negative emotions and pessimism urge investors to cease financial investment in the stock market, and consequently, the stock market returns decreased. In a deadly pandemic, the masses were more concerned about their lives and livelihood and less about wealth and leisure. This research contributes to the literature gap of investors’ psychological behavior during a pandemic outbreak. The study suggests that policy-makers should design a plan to fight against COVID-19. The government should manage the health sector’s budget to overcome future crises. |
format | Online Article Text |
id | pubmed-7902781 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2021 |
publisher | Frontiers Media S.A. |
record_format | MEDLINE/PubMed |
spelling | pubmed-79027812021-02-25 The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States Naseem, Sobia Mohsin, Muhammad Hui, Wang Liyan, Geng Penglai, Kun Front Psychol Psychology A highly transmittable and pathogenic viral infection, COVID-19, has dramatically changed the world with a tragically large number of human lives being lost. The epidemic has created psychological resilience and unbearable psychological pressure among patients and health professionals. The objective of this study is to analyze investor psychology and stock market behavior during COVID-19. The psychological behavior of investors, whether positive or negative, toward the stock market can change the picture of the economy. This research explores Shanghai, Nikkei 225, and Dow Jones stock markets from January 20, 2020, to April 27, 2020, by employing principal component analysis. The results showed that investor psychology was negatively related to three selected stock markets under psychological resilience and pandemic pressure. The negative emotions and pessimism urge investors to cease financial investment in the stock market, and consequently, the stock market returns decreased. In a deadly pandemic, the masses were more concerned about their lives and livelihood and less about wealth and leisure. This research contributes to the literature gap of investors’ psychological behavior during a pandemic outbreak. The study suggests that policy-makers should design a plan to fight against COVID-19. The government should manage the health sector’s budget to overcome future crises. Frontiers Media S.A. 2021-02-10 /pmc/articles/PMC7902781/ /pubmed/33643158 http://dx.doi.org/10.3389/fpsyg.2021.626934 Text en Copyright © 2021 Naseem, Mohsin, Hui, Liyan and Penglai. http://creativecommons.org/licenses/by/4.0/ This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms. |
spellingShingle | Psychology Naseem, Sobia Mohsin, Muhammad Hui, Wang Liyan, Geng Penglai, Kun The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States |
title | The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States |
title_full | The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States |
title_fullStr | The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States |
title_full_unstemmed | The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States |
title_short | The Investor Psychology and Stock Market Behavior During the Initial Era of COVID-19: A Study of China, Japan, and the United States |
title_sort | investor psychology and stock market behavior during the initial era of covid-19: a study of china, japan, and the united states |
topic | Psychology |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7902781/ https://www.ncbi.nlm.nih.gov/pubmed/33643158 http://dx.doi.org/10.3389/fpsyg.2021.626934 |
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