Attitude of Pakistan’s individual investor towards risk during bull and bear markets

Abstract

The prime objectives of this study is to analysis the individual behavior in both bull and bear markets of paksitan. In this paper, we have examined the preferences, attitude towards risk and varying market condition. We have taken the data of 100 companies from various sectors. For this purpose the data of four years have been collected. Empirical evidences have shown that we have used the abnormal returns, volatility and systematic risk for the purpose of measure of risk. Due to various behavior biases, the overall individual behaviors are the different. This study is showing that bull and bear behaviors are associated with the Book to market valuation .we are also trying to show that overconfidence has impact on the investment decision. The objectives of this study are 1) to analyze the individuals behavior in the different market condition.2) In the Bull and Bear market individuals towards risk.3) impact of overconfidence on the different market situation. This study is the related to bull and bear market of Pakistan. It is limited till four years. In 2007 Karachi stock exchange was high growth it was reached till 14075.84 and with annual return of 33.54%. There have observed the significant effect of overconfidence on the risk attitudes. Our studies have taken the stock market of Karachi. Our study is showing very clearly that investor’s behaviors are different in both markets. In this study level of the ownership is taken dependent variable and independent are the no of outstanding shares, EPS, abnormal returns; we have measured the volatility through sigma.