Financial Literacy and Portfolio Dynamics

Milo Bianchi

Journal of Finance, 2018, vol. 73, issue 2, 831-859

Abstract: We match administrative panel data on portfolio choices with survey measures of financial literacy. When we control for portfolio risk, the most literate households experience 0.4% higher annual returns than the least literate households. Distinct portfolio dynamics are the key determinant of this difference. More literate households hold riskier positions when expected returns are higher, they more actively rebalance their portfolios and do so in a way that holds their risk exposure relatively constant over time, and they are more likely to buy assets that provide higher returns than the assets that they sell.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (89)

Downloads: (external link)
https://doi.org/10.1111/jofi.12605

Related works:
Working Paper: Financial Literacy and Portfolio Dynamics (2018)
Working Paper: Financial Literacy and Portfolio Dynamics (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:73:y:2018:i:2:p:831-859

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().