What Matters to Individual Investors? Evidence from the Horse’s Mouth

James Choi and Adriana Z. Robertson

No 25019, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We survey a representative sample of U.S. individuals about how well leading academic theories describe their financial beliefs and decisions. We find substantial support for many factors hypothesized to affect portfolio equity share, particularly background risk, investment horizon, rare disasters, transactional factors, and fixed costs of stock market participation. Individuals tend to believe that past mutual fund performance is a good signal of stock-picking skill, actively managed funds do not suffer from diseconomies of scale, value stocks are safer and do not have higher expected returns, and high-momentum stocks are riskier and do have higher expected returns.

JEL-codes: D14 G11 (search for similar items in EconPapers)
Date: 2018-09
Note: AP
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Citations: View citations in EconPapers (3)

Published as JAMES J. CHOI & ADRIANA Z. ROBERTSON, 2020. "What Matters to Individual Investors? Evidence from the Horse's Mouth," The Journal of Finance, vol 75(4), pages 1965-2020.

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