Investment characteristics, stock characteristics and portfolio diversification of finance professionals

Mohammad Tariqul Islam Khan, Siow-Hooi Tan, Lee-Lee Chong and Hway-Boon Ong

Borsa Istanbul Review, 2017, vol. 17, issue 3, 164-177

Abstract: This study estimates if Malaysian finance professionals' investment characteristics and stock characteristics' preferences affect their portfolio diversification, and whether the effects of these predictors vary across professionals' gender, income and experience. Employing a survey and ordinal regression models, the findings demonstrate that investment characteristics such as active trading, usage of internet and telephone, and saving for retirement objective are likely to improve diversification, whereas diversification worsens with the spending less time on researching investment. With respect to stock's characteristics, trading volume and return on asset are related to better diversification, whereas profit margin and return on equity are related to least diversification. The predictors are found to vary across professionals' gender, income and experience. The results suggest that finance professionals need to consider spending more time on researching investment and stock's characteristics in portfolio composition.

Keywords: Investment characteristics; Stock characteristics; Finance professionals (search for similar items in EconPapers)
JEL-codes: D14 G02 G11 G14 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:bor:bistre:v:17:y:2017:i:3:p:164-177

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