Does Feedback on Personal Investment Success Help?

51 Pages Posted: 10 Jun 2015

See all articles by Steffen Meyer

Steffen Meyer

Aarhus University - Department of Finance; Danish Finance Institute

Linda Urban

Goethe University Frankfurt - House of Finance

Sophie Ahlswede

Goethe University Frankfurt - House of Finance

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Date Written: June 9, 2015

Abstract

In a field study with more than 1,500 customers of an online-broker we test what happens when investors receive repeated feedback on their investment success in a monthly securities account report. The reports show investors’ last year’s returns, costs, their current level of risk and their portfolio diversification. We find that receiving a report results in investors trading less, diversifying more and having higher risk-adjusted returns. Results are robust to controlling for potential play money accounts and changes in report designs. We also find that investors who are less likely to subscribe equally benefit from the report.

Keywords: household finance, field study, individual investors, reporting, investment mistakes, regulation

JEL Classification: D14, G11, G28

Suggested Citation

Meyer, Steffen and Urban, Linda and Ahlswede, Sophie, Does Feedback on Personal Investment Success Help? (June 9, 2015). Available at SSRN: https://ssrn.com/abstract=2616294 or http://dx.doi.org/10.2139/ssrn.2616294

Steffen Meyer (Contact Author)

Aarhus University - Department of Finance ( email )

Fuglesangs Alle 4
DK-8210 Aarhus
Denmark

Danish Finance Institute ( email )

Linda Urban

Goethe University Frankfurt - House of Finance ( email )

Grüneburgplatz 1
Frankfurt am Main, DE 60323
Germany

Sophie Ahlswede

Goethe University Frankfurt - House of Finance ( email )

Grüneburgplatz 1
Frankfurt am Main, DE 60323
Germany

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