Do investors become afraid to invest in the stock market

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Reference no: EM131305349

Ulrike Malmendier and Stefan Nagel have shown that investors' willingness to participate in the stock market is affected by the returns they have experienced during their lives.

Do you think that the explanation for this effect is entirely psychological? That is, do investors simply become afraid to invest in the stock market?

Or, might there be other reasons individual investors purchase less stock following a bear market and more stock following a bull market?

Reference no: EM131305349

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