Investment Horizon, Labor Income, and Portfolio Choice of Private Investors

37 Pages Posted: 13 Jan 2009

See all articles by Yulia V. Veld-Merkoulova

Yulia V. Veld-Merkoulova

Monash University - Department of Finance; Financial Research Network (FIRN)

Date Written: January 9, 2009

Abstract

I empirically investigate the impact of age and self-reported planning horizon on asset allocation decisions for a broad cross-section of individual investors. I find that age and investment horizon play different roles in determining investors' risky portfolios. When risky investments include real estate, the share of risky assets declines with age. Planning horizon tends to influence only investments in financial risky assets, such as stocks, options, and mutual funds. A longer planning horizon leads to an increasing share of risky financial investments, independent of investors' age.

Keywords: Investment horizon, portfolio choice, financial planning

JEL Classification: G11

Suggested Citation

Veld-Merkoulova, Yulia V., Investment Horizon, Labor Income, and Portfolio Choice of Private Investors (January 9, 2009). Available at SSRN: https://ssrn.com/abstract=1326348 or http://dx.doi.org/10.2139/ssrn.1326348

Yulia V. Veld-Merkoulova (Contact Author)

Monash University - Department of Finance ( email )

Building H
Caulfield, Victoria 3145
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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