Terror attacks and individual investor behavior: Evidence from the 2015–2017 European terror attacks

COVID caused a negative bubble. Who profited? Who lost? How stock markets changed?

“…Next, we explore drivers of investor types' trading during the COVİD episode, in particular, how individual investors' net buying led to superior performance and what drove foreign institutional investors' sustained selling. Individual investors' buying during the crash is consistent with their previously-documented contrarian trading behavior ( Griffin et al, 2011 ; Kaniel et al, 2008 ), 5 but contradicts with increased risk aversion following catastrophic events documented in numerous studies ( Wang and Young, 2020 ; Bourdeau-Brien and Kryzanowski, 2020 ; Hasso et al, 2020 ) and findings of a high (low) level of sophistication of institutional (individual) investors in reacting to transient negative news ( Carpentier and Suret, 2021 ). We find that individual investors' buying was driven by a sequence of their usual contrarian trading behavior followed by a unique positive shock to retail investor demand for equities.…”

Individual investors’ trading behavior in Moscow Exchange and the COVID-19 crisis

“…7 Like most other negative bubbles, it was caused by a negatively-perceived unexpected event, leading to a shock to risk aversion. Studies of investor behavior following terror attacks and natural disasters report de-risking and reduction in activities by individual investors ( Wang and Young, 2020 , Hasso et al, 2020 , Bourdeau-Brien and Kryzanowski, 2020 ). Also, conventional wisdom tends to associate individual investors with panic-selling.…”