Reflexivity

AAA

DEFINITION of 'Reflexivity'

The idea that a person's thoughts and ideas tend to be inherently biased. In other words, the values and thoughts of a person will be represented in their work.

In the context of finance, the theory of reflexivity states that investors' and traders' biases can change the fundamentals that assist in determining market prices.

INVESTOPEDIA EXPLAINS 'Reflexivity'

There are two types of reflexivity: personal and epistemological. Personal reflexivity refers to how a person's values, beliefs, acquaintances and interests influence his or her research or work. Epistemological reflexivity attempts to identify the foundations of knowledge and the implications of any findings.

RELATED TERMS
  1. Behavioral Finance

    A field of finance that proposes psychology-based theories to ...
  2. Market Sentiment

    The overall attitude of investors toward a particular security ...
  3. Behavioral Economics

    The study of psychology as it relates to the economic decision ...
  4. Fundamentals

    The qualitative and quantitative information that contributes ...
  5. Market Psychology

    The overall sentiment or feeling that the market is experiencing ...
  6. Premium to Surplus Ratio

    Net premiums written divided by policyholders’ surplus. The premium ...
Related Articles
  1. thinkstock|istock
    Active Trading

    What Is Market Efficiency?

    The efficient market hypothesis (EMH) suggests that stock prices fully reflect all available information in the market. Is this possible?
  2. Forex Education

    George Soros: The Philosophy Of An Elite Investor

    George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular.
  3. Active Trading Fundamentals

    An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.
  4. Active Trading Fundamentals

    Leading Indicators Of Behavioral Finance

    Discover how put-call ratios and moving averages can be used to analyze investor behavior.
  5. Active Trading Fundamentals

    Is finance an art or a science?

    The short answer to this question is "both". Finance, as a field of study and an area of business, definitely has strong roots in other scientific fields such as statistics and mathematics. Furthermore, ...
  6. Active Trading Fundamentals

    What methods can be used to measure and profit from investor sentiment?

    First of all, when people talk about investor sentiment, or market sentiment, they are referring to the aggregate attitude in the investment community. Essentially, investor sentiment is an approximate ...
  7. Trading Strategies

    How effective is creating trade entries after spotting an Exhaustion Gap pattern?

    Understand the components of the exhaustion gap pattern, how and why it occurs, and how it can be used to create an effective trading strategy.
  8. Chart Advisor

    Is It A Breakout? See The Point-And-Figure Chart

    These stocks have broken out of a triple top formation using point-and-figure charting, a bullish sign.
  9. Chart Advisor

    A Multi-Asset Income ETF For Defensive Investors

    In light of market volatility and worries that stocks are overbought, one product worth noting is the Guggenheim Multi-Asset Income ETF.
  10. Chart Advisor

    These Stocks Offer Range-Trading Opportunities

    These stocks are trading in ranges (or were recently) and present opportunities to buy at support or short sell at resistance.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center