The Role of Company Affect in Stock Investments: Towards Blind, Undemanding, Noncomparative and Committed Love

This conceptual article aims to increase our understanding of the influence that individuals' affective evaluations of companies have on their decisions to invest in companies' stocks. Based on various psychological literatures, the authors explicate five different ways in which an individual investor's positive affect toward a company may influence his decisions to buy/hold the company's stock. These include a positive influence that company affect has on optimism and overconfidence about the financial returns expected from the company's stock, as well as a negative influence on the required financial returns from the stock. The authors illustrate the influences with "love" metaphors.