Retail Investors and Investment Fraud Victims: Is There a Connection?
DOI:
https://doi.org/10.61190/fsr.v33i1.3343Keywords:
investment fraud, investor confidence, investor behavior, investor attitudes, investor knowledgeAbstract
This study analyzed specific characteristics of investment fraud victims. Logistic regressions on a national sample of retail investors revealed that overconfident and financially literate investors shared several characteristics with victims of investment fraud. While overconfident investors were the most comfortable with market regulation and making investment decisions that assumed high amounts of risk relative to investment returns, financially literate investors surpassed them in the frequency of annual trading and portfolio allocation to stocks. Surprisingly, overconfident investors favored due diligence via background checks on investment professionals, while financially literate investors did not. Overall, males and younger investors tended to share characteristics with investment fraud victims.
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Copyright (c) 2024 Christopher Rand, Melisande McCrae, Jason Martin
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