Abstract

http://ssrn.com/abstract=2381435
 


 



Which Investment Behaviors Really Matter for Individual Investors?


Benjamin Loos


Goethe University Frankfurt - Department of Finance

Steffen Meyer


Leibniz Universität Hannover

Joachim Weber


Goethe University Frankfurt - Department of Finance

Andreas Hackethal


Goethe University Frankfurt - Department of Finance

December 1, 2014


Abstract:     
Using a European discount broker data set we simultaneously analyze the performance impact of ten investment behaviors. Only under-diversification and lottery-stock preference are significantly related to returns and also economically large. Reducing these behaviors by one standard deviation would improve the average investor's return relative to other investors in our sample by 2.9% for lottery-stock preference and 1.5% for under-diversification. Using a combined investment behavior measure we find that differences in performance between the least and most biased quintiles of investors are 8.1% for returns, and 6.1% for four factor alphas.

Number of Pages in PDF File: 96

Keywords: Investment Behavior, Biases, Individual Investors, Portfolio Performance

JEL Classification: D14, G11

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Date posted: January 20, 2014 ; Last revised: December 2, 2014

Suggested Citation

Loos, Benjamin and Meyer, Steffen and Weber, Joachim and Hackethal, Andreas, Which Investment Behaviors Really Matter for Individual Investors? (December 1, 2014). Available at SSRN: http://ssrn.com/abstract=2381435 or http://dx.doi.org/10.2139/ssrn.2381435

Contact Information

Benjamin Loos (Contact Author)
Goethe University Frankfurt - Department of Finance ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
Steffen Meyer
Leibniz Universität Hannover ( email )
Königsworther Platz 1
Hannover, DE 30167
Germany
Joachim Weber
Goethe University Frankfurt - Department of Finance ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
Andreas Hackethal
Goethe University Frankfurt - Department of Finance ( email )
House of Finance
Grueneburgplatz 1
Frankfurt am Main, Hessen 60323
Germany
+49 69 79833700 (Phone)
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