n Investment Analysts Journal - Stock market over and under-reaction : evidence from investor psychology

Volume 2004, Issue 59
  • ISSN : 1029-3523
  • E-ISSN: 2077-0227
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Extracted from text ... Can the small investor beat the market by 'Dow investing'? 5 Stock market over and under-reaction: Evidence from investor psychology 1. INTRODUCTION* There is evidence, of an empirical nature, that financial markets tend to overreact to some types of information but under-react to others. Under-reaction is said to occur if the market price does not move upward far enough following a signal of good news or, downward enough following bad. Overreaction, on the other hand, is said to occur if the market moves upward too far following good news or, moves downward too far after bad. The relevant ..

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