Wording in Press Affects Investor Expectations

A recent issue of the Journal of Economic Behavior & Organization offers insights as to how wording in the financial press affects investor expectations. Researchers conducted a study asking participants to estimate the future stock price for twelve listed (unnamed) companies after providing information about historical stock prices as well as excerpts from actual newspaper articles from the prior month. The study participants were split into two groups depending on whether the media coverage was positive or negative. The positive news was “accentuated with emphasizer and amplifier words, while the negative (positive) news were attenuated with downtoners.” The factual information […]