The Eurofidai best paper award given to Patrick Roger!

“The behaviour of small investors is not irrational, each investor takes decisions according to their own knowledge and logic” says Patrick Roger, “But it’s true that it does not always meet the classic finance standards and that is what makes them interesting”. This research work conducted by Patrick Roger, finance teacher at EM Strasbourg Business School and Catherine d’Hondt, teacher at the catholic university of Louvain, Belgium, aims indeed to put things into perspective and analyse the behaviour of this category of investors.

To do so, no less than 40 000 portfolios of small investors from Belgium were studied anonymously. Observations show that if these portfolios are generally little diversified and contain a small number of assets, the aggregated pieces of information they reveal are useful management-wise. On an academic level, the aggregation of individual behaviours translates what we call the investor’s sentiment. This sentiment can potentially be useful to the market actors, including the asset managers, to create their portfolios and improve risk management. These learnings are shown in the article “Investor sentiment and stock return predictability: The power of ignorance”, co-written with Catherine d’Hondt, who was given the Eurofidai best paper award. A prize which honours 8 years of a unique and specific work on that matter and reinforces the credibility of the EM Strasbourg Business School and of its Behavioural Finance Chair.