Sentiment Metrics and Investor Demand

L. U.K.E. DeVAULT, Richard Sias, Laura Starks

Research output: Contribution to journalArticle

15 Scopus citations

Abstract

Recent work suggests that sentiment traders shift from safer to more speculative stocks when sentiment increases. Exploiting these cross-sectional patterns and changes in share ownership, we find that sentiment metrics capture institutional rather than individual investors’ demand shocks. We investigate the underlying economic mechanisms and find that common institutional investment styles (e.g., risk management, momentum trading) explain a significant portion of the relation between institutions and sentiment.

Original languageEnglish (US)
Pages (from-to)985-1024
Number of pages40
JournalJournal of Finance
Volume74
Issue number2
DOIs
StatePublished - Apr 1 2019

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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