How Long Do Equity Owners Hang on to Their Stocks?

21 Pages Posted: 6 Apr 2017

Date Written: Mar 15, 2017

Abstract

We characterize the equity holding periods for all equity owners in a stock market over a 15 year period. The median holding period is 0.75 years. We show that the hazard function for equity ownership is characterized by negative aging, an equity owner is less and less likely to realize a position as time passes. There are clear differences between owner types, where private individuals have the longest holding periods, and financial owners are the least patient. Wealthier households have shorter holding periods. Using turnover to estimate holding periods severely over-estimates actual holding periods.

Keywords: Equity Holding period; Duration; Failure Time; Survival

JEL Classification: D14; G11; G12

Suggested Citation

Ødegaard, Bernt Arne, How Long Do Equity Owners Hang on to Their Stocks? (Mar 15, 2017). Available at SSRN: https://ssrn.com/abstract=2946915 or http://dx.doi.org/10.2139/ssrn.2946915

Bernt Arne Ødegaard (Contact Author)

University of Stavanger ( email )

UiS Business School
Stavanger, NO-4036
Norway

HOME PAGE: http://ba-odegaard.no

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