| Abstract: | This study examines how online investors process and comprehend the disclosures about a mutual fund through two factors: Visual communications and knowledge about investing in mutual funds. The results reveal that visual communications of the disclosures affect investors’ attention toward and processing of the disclosures, but not comprehension of the disclosures. Specifically, two types of visual communications, semantic and feature primes, influence investors’ attention toward the disclosures and processing of the disclosures more than categorical primes. More importantly, investment knowledge influences comprehension of the disclosures. The results of this study promote informed investment decisions through two main approaches: Adopting effective visual communications of disclosures; and implementing investor education initiatives to enhance investors’ ability to process disclosures. In fact, an educated and informed investor provides the best defense against costly mistakes in investing. |
