Financial sophistication and portfolio decisions: the case of chinese household

Peiran Guo ()
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Peiran Guo: NEOMA - Neoma Business School

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Abstract: I use a unique household-level survey in China to investigate the relationship between household's financial sophistication and their portfolio choice. I find that an additional unit of financial sophistication is associated with 76 bps of portfolio return increase. This effect is explained by the fact that more financially sophisticated households are able to identify the assets whose returns are increasing, and therefore, they opportunistically rebalance their portfolios to capture these future gains.

Date: 2021-05-26
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Published in AFFI 2021 : 37th International Conference of the French Finance Association, French Finance Association, May 2021, Nantes (Online event), France

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03337842

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