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Does financial well-being affect portfolio construction? Evidence from an online survey

Brent Davis

Economics Bulletin, 2018, vol. 38, issue 1, 362-366

Abstract: Portfolio construction has emerged as an important topic as retirement programs are increasingly composed of defined contribution plans. Little research has investigated how an individual´s current financial well-being affects portfolio construction. Using two measures of financial well-being, I examine how individuals create hypothetical retirement portfolios using responses from an online survey. Individuals who are better able to cope with a financial emergency allocate a higher percentage to equities and less to money market funds when controlling for risk preferences and demographics.

Keywords: Portfolio Choice; Financial Well-Being; Behavioral Finance; Personal Finance (search for similar items in EconPapers)
JEL-codes: G1 D1 (search for similar items in EconPapers)
Date: 2018-02-27
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