Financial Attention; Account logins fall by over 11% after market declines. Investors also pay less attention when news media attention to the stock market is low and the VIX volatility index is high

November 2, 2013 Leave a comment

Financial Attention

Nachum Sicherman Columbia University; Institute for the Study of Labor (IZA)

George Loewenstein Carnegie Mellon University – Department of Social and Decision Sciences

Duane J. Seppi Carnegie Mellon University – David A. Tepper School of Business

Stephen P. Utkus The Vanguard Group, Inc. – Center for Retirement Research

October 10, 2013

Abstract:      
Novel panel data on daily online logins for a large sample of 401(k) retirement accounts let us identify causal drivers of investor attention to their personal portfolios. We find support for selective attention to portfolio information that seems unrelated to trading-based motivations and which is consistent with psychological motives. Account logins fall by over 11% after market declines. Investors also pay less attention when news media attention to the stock market is low and the VIX volatility index is high. The attention/return correlation and level of attention are strongly related to investor demographics (gender, age) and financial condition (wealth, holdings).

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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