What drives individual investors in the bear market?

Rong Xu* (Corresponding Author), Yaodong Liu* (Corresponding Author), Nan Hu* (Corresponding Author), Jie (Michael) Guo* (Corresponding Author)

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


This study uses a unique dataset from a large anonymous brokerage firm to examine the net investment of individual investors during a bear market. The study's empirical evidence reveals that individual investors provide liquidity by acting as net buyers. Particularly, male and younger investors tend to have a higher buying intensity than the others during the market downturn. Besides, better performances when the market crashed encourage investors to be overconfident, thus exhibiting self-attribution bias since we do not find similar results in the bull-market subsample. Results from the stock-level analysis imply that investors tend to buy stocks with worse short-term past performance, higher liquidity, and larger market capitalization. Our findings on the individual investor trading behaviour cannot be explained by either a superior stock-picking ability or a higher tendency to gamble during the market downswing.
Original languageEnglish
Article number101113
Number of pages22
JournalThe British Accounting Review
Issue number6
Early online date21 Jun 2022
Publication statusPublished - Nov 2022


  • Individual investors
  • Financial crisis
  • Chinese stock markets
  • Self-attribution bias


Dive into the research topics of 'What drives individual investors in the bear market?'. Together they form a unique fingerprint.

Cite this