Individual Investor Activity and Performance

43 Pages Posted: 20 Jan 2012

See all articles by Magnus Dahlquist

Magnus Dahlquist

Stockholm School of Economics; Swedish House of Finance

Jose Vicente Martinez

University of Connecticut

Paul Söderlind

University of St. Gallen

Multiple version iconThere are 5 versions of this paper

Date Written: January 2012


We examine the activity and performance of a large panel of individual investors (approximately 70,000 investors and their daily returns over the 2000 to 2010 period) in Sweden's Premium Pension System. We document strong inertia in individuals' choices and changes of mutual funds. We find that active investors outperform passive investors, and that there is a causal effect of fund changes on performance. The outperformance is primarily the result of dynamic fund selection. Activity is beneficial for the individual investor, whereas extreme flows out of mutual funds (which we attribute to financial advisors) affect funds' net asset value negatively for all investors.

Keywords: 401(k), Coordinated fund changes, Financial advisors, Fire sales

JEL Classification: G11, G23, H55

Suggested Citation

Dahlquist, Magnus and Martinez, Jose Vicente and Söderlind, Paul, Individual Investor Activity and Performance (January 2012). CEPR Discussion Paper No. DP8744, Available at SSRN:

Magnus Dahlquist (Contact Author)

Stockholm School of Economics ( email )

Drottninggatan 98
Stockholm, SE-111 60

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm

Jose Vicente Martinez

University of Connecticut ( email )

2100 Hillside Road, Unit 1041
Storrs, CT 06269
United States

HOME PAGE: http://

Paul Söderlind

University of St. Gallen ( email )

Rosenbergstrasse 52
St. Gallen, 9000
+41 71 224 7064 (Phone)
+41 71 224 7088 (Fax)

HOME PAGE: http://

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