haku: @indexterm FINLAND / yhteensä: 889
viite: 244 / 889
| Tekijä: | Westerholm, P.J. Ollila, M. |
| Otsikko: | Impact of gender, age and language on investment strategy |
| Lehti: | Liiketaloudellinen aikakauskirja
2003 : 2, p. 179-196 |
| Asiasana: | Investment Strategy Gender Portfolio selection Diversification Finland Nordic countries |
| Kieli: | eng |
| Tiivistelmä: | It has been proposed that the portfolio (here as: p.) returns of individual private investors (investor-s here as: i.) suffer due to excessive trading activity (here as: t-a.). Behavioral finance theory explains this as a result of i. overconfidence. According to traditional p. theory a well diversified p. is mainly subjected to market risk, when stock specific risk is diversified away. Based on the assumption that sophisticated i. make efficient investment decisions, this study proposes that p. diversification is a measure of i. sophistication. To investigate if i. of different gender, age and language background are characterized by systematic differences in t-a., diversification and p. value, there is proposed a model of i. sophistication in which t-a. and p. diversification are measured for a large sample of individual i. The data set used includes the share holding records for 11.795 individual private i. randomly selected from the Finnish Central Securities Depository (FCSD). The data contains daily records of the trades of all market participants over the period Jan. 1995 through May 31, 2000. Male i. trade more frequently and are more diversified than female i. Investors in the age group (2645) trade the most. I. in the age group (4665) and i. with large p. are the most diversified. Finnish speaking i. trade more frequently than Swedish speaking investors. This study suggests that the poor diversification observed for most i. is due to mental accounting. Earlier studies have reported poor performance for more active i. and explain this as a result of excess activity. The difference in performance btw. more and less active i. might also in the light of our study be caused by differences in diversification. Investors that trade less are also less diversified and are thus compensated for their higher risk by higher return. I. trading more are better diversified and are not performing as well in rising markets since their risk is also lower. This paper finds little evidence of excessive trading by Finnish i. |
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