Trading Behavior of Swedish Retirement Investors During the COVID-19 Pandemic

18 Pages Posted: 2 Feb 2021 Last revised: 3 Oct 2022

See all articles by Johannes Hagen

Johannes Hagen

Jönköping University; Netspar

Amedeus Malisa

Jonkoping University - Jonkoping International Business School (JIBS)

Thomas Post

Maastricht University - School of Business and Economics - Department of Finance; Netspar

Date Written: March 14, 2022

Abstract

How did investors in the Swedish Premium Pension System (PPS) react to the stock market shock ignited by the COVID-19 pandemic? Trades more than doubled, and shifted capital from equity funds to low risk interest funds. The increased trading during the market tumult was disproportionately concentrated among investors in the top of the pension capital distribution. In economic terms, however, trading stayed at low levels—less than two percent of investors traded in March 2020. The PPS investors thus avoided the many mistakes that retail investors incur when trying to outsmart the market. Potentially, the often-criticized PPS choice architecture inducing inertia provided positive side effects. Finally, we find no effect of the COVID-19 outbreak on public pension withdrawals.

Keywords: Financial crisis, COVID-19 pandemic, Retirement investors, Trading behavior, Risk-taking behavior

JEL Classification: D14, D81, G01, G11, G28

Suggested Citation

Hagen, Johannes and Malisa, Amedeus and Post, Thomas, Trading Behavior of Swedish Retirement Investors During the COVID-19 Pandemic (March 14, 2022). Available at SSRN: https://ssrn.com/abstract=3775036 or http://dx.doi.org/10.2139/ssrn.3775036

Johannes Hagen (Contact Author)

Jönköping University ( email )

Gjuterigatan 5
Jönköping, 553 18
Sweden

HOME PAGE: http://www.johanneshagen.com

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Amedeus Malisa

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

Thomas Post

Maastricht University - School of Business and Economics - Department of Finance ( email )

Tongersestraat 53
Maastricht, 6200 MD
Netherlands
+31 43 38 83899 (Phone)
+31 43 38 84875 (Fax)

HOME PAGE: http://www.thomas-post.com

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.netspar.nl

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
188
Abstract Views
1,364
Rank
241,075
PlumX Metrics