The Influence of Different Investment Horizons on Risk Behavior

Niklas Siebenmorgen () and Martin Weber
Additional contact information
Niklas Siebenmorgen: Graduiertenkolleg Finanz-/Gütermärkte, Postal: L 13, 15, D-68131 Mannheim

No 00-48, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: For a longer investment period investment consultants use to recommend a larger proportion of risky assets in investors' portfolios. In an experiment we examine the effect of different investment horizons on investors' risk behavior. We are interested both in the participants' risk perception behavior and in their asset allocation behavior. Furthermore, we examine framing effects regarding the presentation of historical one-year versus five-year returns to our participants. As before we find significant underestimations of long-term risks in all informational conditions that lead to a higher proportion of risky assets in the long-term portfolios. One explanation for this behavior is the belief in mean reversion, as our data show.

Pages: 42 pages
Date: 2000-10-18
New Economics Papers: this item is included in nep-cfn, nep-exp and nep-fin
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:xrs:sfbmaa:00-48

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim Contact information at EDIRC., Sonderforschungsbereich 504, University of Mannheim
Bibliographic data for series maintained by Carsten Schmidt ( this e-mail address is bad, please contact ).