Do Individual Investors Trade on Investment-Related Internet Postings?

Manuel Ammann () and Nic Schaub ()
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Manuel Ammann: Swiss Institute of Banking and Finance, University of St. Gallen, CH-9000 St. Gallen, Switzerland
Nic Schaub: WHU – Otto Beisheim School of Management, D-56179 Vallendar, Germany

Management Science, 2021, vol. 67, issue 9, 5679-5702

Abstract: Many people share investment ideas online. This study investigates whether individual investors trade on investment-related internet postings. We use unique data from a social trading platform that allow us to observe the shared portfolios of traders, their posted comments, and the replicating transactions of followers. We find robust evidence that followers increasingly replicate shared portfolios of traders after the posting of comments. However, postings do not help followers identify portfolios that deliver superior performance in the future. In a cross-sectional analysis, we show that it is mainly followers typically considered to be unsophisticated who trade after comment postings.

Keywords: internet postings; individual investors; trading behavior; social trading; FinTech (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:67:y:2021:i:9:p:5679-5702

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