The impact of COVID-19 on investors’ behavior: the case of anchoring and 52 week high

This paper aims to examine how the COVID-19 pandemic influenced investor behavior in Kuwait’s emerging market, focusing on changes in anchoring patterns tied to the 52-week high/low strategy. Using daily stock data from 2012 to 2024, the author find that investors typically favored momentum strategies anchored to 52-week highs. During the pandemic, however, a marked shift occurred in which investors gravitated toward stocks near their 52-week lows, likely perceiving them as undervalued or safer amid increased uncertainty. This contrarian shift proved profitable, with the 52-week low strategy outperforming during the crisis. Postpandemic, investor behavior largely reverted to momentum-based preferences. These findings highlight the temporary adaptability of anchoring heuristics under crisis conditions and offer novel insights into behavioral finance within the GCC context. The study underscores the importance of dynamic investor psychology in shaping market behavior during periods of systemic stress.