Explanation of Financial Defense Mechanisms and Financial Phantasy on the Investor Financial Bubble

Capital markets are among the most important and popular financial markets in most countries. Due to its importance in the nation’s economy, capital market problems have always been considered. One of the problems faced by Iran’s capital market in recent years is the financial bubble. When investors are invested in a bubble form, irrational feelings and dreams are often used instead of rational analysis. There are also some changes in stock price without any fundamental reason from the unconscious and powerful emotions of capital (financial defense mechanisms and financial phantasy) so that investors in the capital market cannot bring back prices because of the high excitement created. In addition, due to recent events in the Iranian stock market, it is possible to research to understand the relationship between the unconscious processes (defense mechanisms and financial phantasies) with the financial bubble of investors. On the other hand, the subject is considered by researchers due to the new aspects of financial unconscious feelings (financial defense mechanisms and financial phantasy) and financial collapse of capital.

This research is a mixed type that is applied in terms of purpose and descriptive. For this purpose, 415 questionnaires (300 electronic questionnaires, 115 paper questionnaires) were distributed among investors, of which 288 questionnaires were accepted. Data analysis was performed using structural equations modeling (SEM) in Amos and using maximum likelihood estimation method. Also in this study, the bootstrap method was used to solidify the results. In addition, in order to evaluate the effect of unanswered questionnaires, the maximum likelihood method with complete information and Spss and Amos software were used. 

The results show that the proposed model has a good fit to express the relationship between financial unconscious feelings (financial defense and financial phantasy) and investor financial bubble. Also, financial defense mechanisms have a positive and significant relationship with the financial bubble of investors. In addition, financial phantasy has a positive and significant effect on the financial bubble of investors. 

Generally, it can be concluded that increasing the unconscious feelings caused by financial defense mechanisms and financial phantasy can raise the possibility of financial collapse. Therefore, the Iranian stock market is sensitive to the types of unconscious feelings, such as financial defense mechanisms and financial phantasy. The findings of this research can help capital market experts control the price volatility and prevent financial bubbles because by recognizing the roots of the formation of financial bubbles, they can provide the necessary warnings to educate and finance the transaction. However, it should not be noted that the effect of contagion on the stock market and the formation of financial bubbles should not be ignored. Therefore, the stock market planners and macro policymakers of the country are recommended to use all the capital market support levers to protect and protect the capital market and protect micro and macro and with intelligent management of the market before the occurrence of big disasters prevent capital flight and public confidence.