Title: Empirical study on conservative and representative heuristics of Hong Kong small investors adopting momentum and contrarian trading strategies

Authors: Wing-Keung Wong; Sheung-Chi Chow; Tai-Yuen Hon; Kai-Yin Woo

Addresses: Department of Finance, Fintech Center, and Big Data Research Center, Asia University, No. 500, Lioufeng Road, Wufeng, Taichung, 41354, Taiwan; Department of Medical Research, China Medical University Hospital, Taichung, Taiwan No. 91, Xueshi Road, North District, Taichung City, 404, Taiwan; Department of Economics and Finance, Hang Seng Management College, Hang Shin Link, Siu Lek Yuen, Shatin, New Territories, 999077, Hong Kong; Department of Economics, Lingnan University, Room 302, Dorothy Y L Wong Building, 8 Castle Peak Road, Tuen Mun, New Territories, 999077, Hong Kong ' Research Institute for Business, Hang Seng Management College, Hang Shin Link, Siu Lek Yuen, Shatin, New Territories, 999077, Hong Kong ' Business, Economic and Public Policy Research Centre, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, 999077, Hong Kong ' Department of Economics and Finance, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill, North Point, 999077, Hong Kong

Abstract: Recently, a new Bayesian approach has been developed to explain some market anomalies. In this paper, we conduct a questionnaire survey to examine whether the theory holds empirically by studying the conservative and representative heuristics by Hong Kong small investors who adopt momentum and/or contrarian trading strategies. In addition, our study provides evidence for the small investors on their time horizon and risk tolerance when facing uncertainty in their investments. Our findings are useful to small investors in their investment decision making and useful to financial advisors in providing service to small investors.

Keywords: conservative and representative heuristics; momentum and contrarian trading strategies.

DOI: 10.1504/IJRM.2018.091836

International Journal of Revenue Management, 2018 Vol.10 No.2, pp.146 - 167

Received: 15 Nov 2016
Accepted: 17 Nov 2017
Published online: 18 May 2018 *

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