Individual Investor Activity and Performance

52 Pages Posted: 7 May 2014 Last revised: 16 Sep 2016

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: May 31, 2016


We examine the daily activity and performance of a large panel of individual investors in Sweden's Premium Pension System. We find that active investors earn higher returns and risk-adjusted returns than inactive investors. A performance decomposition analysis reveals that most of the outperformance of active investors is the result of these investors successfully timing mutual funds and asset classes. While activity is beneficial for some investors, extreme flows out of mutual funds affect funds' net asset values negatively for all investors. Financial advisors, by contributing to coordinate investments and redemptions, exacerbate these negative effects.

Keywords: 401(k), coordinated fund changes, defined contribution, financial advisors, mutual fund flows

JEL Classification: G11, G23, H55

Suggested Citation

Dahlquist, Magnus and Martinez, Jose Vicente and Söderlind, Paul, Individual Investor Activity and Performance (May 31, 2016). University of St. Gallen, School of Finance Research Paper No. 2014/8, Forthcoming in Review of Financial Studies, Available at SSRN: or

Magnus Dahlquist

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 (Contact Author)

University of St. Gallen ( email )

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

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