Investor-advisor Big Five personality similarity and stock trading performance

Muhammad Zubair Tauni, Salman Yousaf and Tanveer Ahsan
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Muhammad Zubair Tauni: Zhejiang University [Hangzhou, China]
Salman Yousaf: School of Management. Fudan University
Tanveer Ahsan: ESC [Rennes] - ESC Rennes School of Business

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Abstract: The purpose of this study is to investigate how investor-advisor similarities (differences) in Big Five personality are related to stock trading performance. We used an online survey questionnaire to collect data from 314 investor-advisor dyads in the Chinese stock market. Personality similarity (difference) between investor and advisor was determined using "difference score analysis". The results showed that investor-advisor similarity in terms of openness, extraversion, conscientiousness, and agreeableness is positively related to investor stock trading performance. On the other hand, the investor-advisor similarity in neuroticism negatively affects investor trading performance. Further analysis also showed that investor-advisor similarity in demographics such as gender and education is related to stock trading performance. This research posits that retail investors show different trading performances if their personalities and demographics match (mismatch) with their advisors. Therefore, the patterns of investors' trading performance can be jointly explained by both investors' endogenous as well as exogenous factors.

Keywords: Personality similarity; Trading performance; The Big Five; Chinese stock market; Behavioral finance (search for similar items in EconPapers)
Date: 2020-03
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Citations: View citations in EconPapers (9)

Published in Journal of Business Research, 2020, 109, pp.49-63. ⟨10.1016/j.jbusres.2019.10.055⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02459823

DOI: 10.1016/j.jbusres.2019.10.055

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