Individual Investor Activity and Performance

Söderlind, Paul, Magnus Dahlquist and Jose Vicente Martinez
Authors registered in the RePEc Author Service: Paul Söderlind

No 8744, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine the activity and performance of a large panel of individual investors (approximately 70,000 investors and their daily returns over the 2000 to 2010 period) in Sweden's Premium Pension System. We document strong inertia in individuals' choices and changes of mutual funds. We find that active investors outperform passive investors, and that there is a causal effect of fund changes on performance. The outperformance is primarily the result of dynamic fund selection. Activity is beneficial for the individual investor, whereas extreme flows out of mutual funds (which we attribute to financial advisors) affect funds' net asset value negatively for all investors.

Keywords: 401(k); Coordinated fund changes; Financial advisors; Fire sales (search for similar items in EconPapers)
JEL-codes: G11 G23 H55 (search for similar items in EconPapers)
Date: 2012-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Individual Investor Activity and Performance (2017)
Working Paper: Individual Investor Activity and Performance (2016)
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