An Investigation of the Relationship between Gender and Investor Behavior During the 2022 Market Meltdown

Abstract

This study used primary data collected during October 2022 from 2,119 U.S. retail investors to investigate how individuals were coping with the declining stock market and rising inflation. Using a path analysis, this study sought to explain the relationships between gender, financial stress, investment overconfidence, and trading behavior. First, a positive relationship was found between males and moving from stocks and bonds to cash. Next, the results indicated that females were more likely to have experienced financial stress and males were more likely to have displayed investment overconfidence. Both financial stress and investment overconfidence were positively related to moving from stocks and bonds to cash. The indirect effects of financial stress and investment overconfidence, however, were small and only partially mediated the relationship between gender and trading behavior.