A study on small investors’ sentiment, financial literacy and stock returns: evidence for emerging market


  • Amari Mouna Faculty of Economics and Management of Sfax, FINANCE and accounting
  • Jarboui Anis ISAAS Tunisia






Anchoring, Emerging Market, Experience, Financial Literacy, Portfolio Return.


Humans are constantly susceptible to cognitive errors and these create biases in their judgments. The main purpose of this paper is to determine how the sentiment of the small investors affects their decision making by examining their portfolio returns and does experience level can reduce this errors.

The proposed model of this research uses the classification trees analyses to examine this relationship. Investor‘s biases have been measured by means of a questionnaire comprising several items. As for the selected sample, it has been composed of 128 small investors actively trading on the Tunisian stock market.

The findings show that the portfolio returns of the small investors were somehow influenced by behavioral biases and the results indicate that anchoring, familiarity, age and experience to be important contributory factors to the decision making performance. Also our findings reveal that their experience level can reduce the biases in their judgments.


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