Is herding a safe haven for investment?. Issue 2 (19th January 2021)

• Record Type: Journal Article
• Authors: Chen, Yi-Chang; Kuo, Shih-Ming; Yang, Yu-Wen
• Is Part Of: Applied economics letters. Volume 28:Issue 2(2021)
• Page Start: 95
• Page End: 99
• Publication Date: 2021-01-19
• Subjects: Fad -- herd behaviour -- event study -- irrational behaviour -- investment; G10 -- G14; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2020.1734180
• Languages: English
• ISSNs: 1350-4851

Abstract

ABSTRACT: This paper investigates whether herd behaviour followed by fad can be regarded as a safe haven for investment. We found that investors have anticipatory herd behaviour towards the Apple fad. Herding creates a safe zone and is adopted as a means to reduce the risk of irrational behaviour, especially for companies with poor profitability. On the whole, herding may lead to positive market returns and can be used as a short-term safe haven under uncertainty.