Investor’s Sentiment in Financial Markets

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Running head: INVESTOR’S SENTIMENT IN FINANCIAL MARKETS
INVESTOR’S SENTIMENT IN FINANCIAL MARKETS
Name of the Student
Name of the University
Author’s Note

1INVESTOR’S SENTIMENT IN FINANCIAL MARKETS
Abstract
Investor sentiments are described as bearish or bullish as when the market is bearish then
it controls the stock prices influencing it to monotonically decrease. However, when the market
becomes bullish then the stock prices goes up. Market is open and hence it is often found to be
driven by emotions that are not always synonymous to the fundamental value about the business
performance wild the feelings and emotions of the investors have a greater role in dragging the
stock prices down or up. Investors and traders are found to make profit by finding stocks that are
either undervalued or overvalued based on the sentiments of the market and hence various
indicators used to measure the market sentiment and determine the best stocks that can be traded
and forecast upon its future performance. The research proposal highlights the importance of
understanding the role of investors sentiments in realizing the functionality of the financial
market in terms of its price fluctuations of the stocks, its undervalue or overvalued. The extent up
to which the investors sentiments or the market sentiments plays role in the financial market is
the aspect of concern for research as proposed through the research proposal.

2INVESTOR’S SENTIMENT IN FINANCIAL MARKETS
Table of Contents
Abstract............................................................................................................................................1
Introduction......................................................................................................................................3
Research Objective..........................................................................................................................3
Research Questions..........................................................................................................................3
Review of Literature........................................................................................................................4
Research Methodology....................................................................................................................6
Research Instruments.......................................................................................................................7
Scope & significance of the Research.............................................................................................7
Limitations of the Research.............................................................................................................8
Gantt chart.......................................................................................................................................8
Bibliography..................................................................................................................................10

3INVESTOR’S SENTIMENT IN FINANCIAL MARKETS
Introduction
The wider aspect of financial market is dependent upon various factors that influence it’s
significantly. Among the various factors that influence the behavior of the financial market,
investors plays a crucial role. The complicated structure of the market gets affected by the
trading decisions. Investor sentiments displays a frictional force that may regulate the
performance of the financial market (Chui & Titman, 2017). The behavior of the financial
market thesis its effect show the stock Returns reflection of the aggregate sentiments of the
investor in a reduced form. The limit to arbitrage and sentiment this becomes two of the most
irrefutable assumptions to explain the stock of low capitalization, unprofitable younger and
growing stocks, highly volatile non-dividend paying stocks, etc. all are disproportionately
sensitive to the broader waves of investor sentiments. Hence it is necessary total into the aspect
of investor sentiment and how it plays a crucial role in the financial market through the
examination of theoretical and empirical evidence (Peng et al., 2015).
Research Objective
The objective of the research encompasses the investor sentiments and how it influence
the financial market.
Research Questions
The Research question is based upon the research objective which can be incorporated as
follows:
1. How does the investor sentiments renders impact upon the financial market?