What Matters to Individual Investors in a Welfare State?

61 Pages Posted: 21 Apr 2023 Last revised: 18 Feb 2024

Date Written: February 16, 2024

Abstract

We survey a sample of Finnish individual investors to rank the importance of 37 factors hypothesized to affect portfolio equity share and compare the results to a recent US survey (Choi and Robertson, Journal of Finance, 2020). Investors in both countries regard years until retirement, need to hold cash, and experience of living through returns as important. US investors put relatively more emphasis on hedging background risk and dealing with trusted financial market participants and financial advisors. In contrast, Finnish investors put more weight on return beliefs, media, and personal experiences. Some of these contrasts in beliefs and preferences likely reflect cross-country differences in levels of trust and real or perceived background risk.

Keywords: Survey, Portfolio choice, Equity allocation, Equity share

JEL Classification: G40, G50, C83

Suggested Citation

Lof, Matthijs and Rantapuska, Elias Henrikki and Wirtz, Alexander, What Matters to Individual Investors in a Welfare State? (February 16, 2024). Available at SSRN: https://ssrn.com/abstract=4417430 or http://dx.doi.org/10.2139/ssrn.4417430

Matthijs Lof (Contact Author)

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland

HOME PAGE: http://sites.google.com/site/matthijslof/

Elias Henrikki Rantapuska

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland

Alexander Wirtz

EY-Parthenon

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