Is College a Focal Point of Investor Life?

Massimo Massa and Andrei Simonov

Review of Finance, 2011, vol. 15, issue 4, 757-797

Abstract: We study the link between college interaction and portfolio choice. We consider both the general imprinting of values shared by all the students attending the same school--values-based interaction--and the ensuing interaction with the classmates--bonding-based interaction. We show that even after controlling for the standard motivations of portfolio theory, college-based interaction affects the choice of styles--growth/value investing as well as stock picking. Both dimensions of interaction--values-based and bonding-based interactions--contribute to shape the investor choice. Overall, college interaction significantly affects portfolio choice. Investors invest in the same stocks in which their former classmates do. Each individual college leaves a specific and distinct trace on his students. Copyright 2011, Oxford University Press.

Date: 2011
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