Consistent with the well-documented relation between political orientation and psychological traits, hedge funds' political orientations are related to their portfolio decisions. Relative to politically conservative hedge funds, politically liberal hedge funds exhibit a preference for smaller stocks, less mature companies, volatile stocks, unprofitable companies, non-dividend paying companies, and lottery-type securities. Politically liberal hedge funds are also more likely to enter new positions or fully exit existing positions, and make larger adjustments to their U.S. equity market exposure. Our results suggest that psychological characteristics can influence the portfolio decisions of even those at the very top of the financial sophistication ladder.
| Identifer | oai:union.ndltd.org:arizona.edu/oai:arizona.openrepository.com:10150/623039 |
| Date | 02 1900 |
| Creators | DeVault, Luke, Sias, Richard |
| Contributors | Department of Finance, Eller College of Management, University of Arizona |
| Publisher | ELSEVIER SCIENCE BV |
| Source Sets | University of Arizona |
| Language | English |
| Detected Language | English |
| Type | Article |
| Rights | © 2016 Elsevier B.V. All rights reserved. |
| Relation | http://linkinghub.elsevier.com/retrieve/pii/S0378426616301959 |
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