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The Journal of Business Publication Info

Stable URL: http://www.jstor.org/stable/10.1086/209754
Do Investors Care about Sentiment?
Edwin J. Elton, Martin J. Gruber and Jeffrey A. Busse
The Journal of Business , Vol. 71, No. 4 (October 1998), pp. 477-500
Article Stable URL: http://www.jstor.org/stable/10.1086/209754
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Do Investors Care about Sentiment?*

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Abstract(back to top)

Results of recent research indicate small investor sentiment, as measured by the change in the discount on closed‐end funds, is an important factor in the return generating process for common stocks. We find no evidence of it being an important factor in the return generating process. We next examine its impact on expected returns and whether one set of firms with high sensitivity to this factor—closed‐end funds—offers, and can be expected to offer, a higher expected return. Our findings do not support small investor sentiment as a priced factor, either in common stocks or closed‐end funds.

Bibliographic Information(back to top)

  • Do Investors Care about Sentiment?
  • Edwin J. Elton, Martin J. Gruber and Jeffrey A. Busse
  • The Journal of Business
  • Vol. 71, No. 4 (October 1998) (pp. 477-500)

Author Information(back to top)

Edwin J. Elton

New York University

Martin J. Gruber

New York University

Jeffrey A. Busse

Emory University

Notes and References(back to top)

This item contains 1 note(s).

Notes

* We would like to thank Doug Diamond (the editor) and an anonymous referee for helpful comments.

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