Factors affecting Vietnamese investors' overconfidence

Abstract

This study focuses on the psychological aspect of the Vietnamese investors and its effect on their investment decision. In particular, we study the overconfidence phenomenon and its possible determinants through a survey methodology. These determinants include age, experience, academic qualifications, financial knowledge, opinions of financial advisors, past performance of the stock and the amount of information disclosed to investors. Our sample consists of 127 randomly selected investors. The results show that Vietnamese investors are overconfident of their trading skills and investment decisions. A stepwise analysis shows that experience is the only factor that significantly increases overconfidence.