Stock Market Image: The Good, the Bad, and the Ugly

This paper introduces the concept of stock market image and presents a six-dimension scale for measuring it. Using cross-sectional survey data, application of the scale reveals that retail investors have widely heterogeneous perceptions of the stock market ranging from highly positive to highly negative. Five image profiles were generated using cluster analysis, each representing a different perspective on the stock market. These profiles were found to reflect personal and subjective characteristics of investors, including financial knowledge and investing experience. Understanding stock market image is important because it influences investing behaviors, expectations, and experiences, including the decision to participate in or avoid equities markets. Members of the stock market supply chain are thus encouraged to consider their roles and responsibilities in managing, promoting, and improving it.