Trading Puzzle, Puzzling Trade

Orhan Erdem, Evren Arık () and Serkan Yüksel
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Serkan Yüksel: Borsa İstanbul

Iktisat Isletme ve Finans, 2014, vol. 29, issue 345, 83-102

Abstract: We explore the return performance of individual investors with respect to various factors such as portfolio size, turnover, holding period and also demographic factors: gender and age. We examine the daily trades in Borsa İstanbul (formerly Istanbul Stock Exchange) of 20,000 individual investors over the two year period 2011-2012. Utilizing a weekly data set, we bring new evidence to the current debates on individual investors’ trading patterns. Our findings can be summarized as follows: There is a positive relationship between holding period and return up to a certain level. The return of the individual portfolio is positively correlated with the portfolio size. Almost 70% of all individual investors cannot beat the market. Investors who have high turnover underperform compared to those who have lower turnover. Male investors trade more and lose more vis-à-vis the female and older investors have higher returns.

Keywords: Individual Investor; Turnover; Portfolio Size; Stock Returns; Holding Period (search for similar items in EconPapers)
JEL-codes: G12 G14 (search for similar items in EconPapers)
Date: 2014
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