Individuals’ Affect-Based Motivations to Invest in Stocks: Beyond Expected Financial Returns and Risks

The purpose of this article is to study whether an individual investor's affect towards a company causes him extra motivation to invest in the company's stock, over and beyond expected financial returns and risk. The authors examine survey data from 400 investors. They find that most investors had affect-based, extra motivation to invest in stocks, over and beyond financial return expectations. The more positive an individual's attitude towards the company was, the stronger was his extra investment motivation. Moreover, a special affective relationship that an investor may have towards a company—affective self-affinity—can further explain the extra investment motivation.