NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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What Matters to Individual Investors? Evidence from the Horse's Mouth

James J. Choi, Adriana Z. Robertson

NBER Working Paper No. 25019
Issued in September 2018, Revised in February 2020
NBER Program(s):Asset Pricing

We survey a representative sample of U.S. individuals about how well leading academic theories describe their financial beliefs and decisions. We find substantial support for many factors hypothesized to affect portfolio equity share, particularly background risk, investment horizon, rare disasters, transactional factors, and fixed costs of stock market participation. Individuals tend to believe that past mutual fund performance is a good signal of stock-picking skill, actively managed funds do not suffer from diseconomies of scale, value stocks are safer and do not have higher expected returns, and high-momentum stocks are riskier and do have higher expected returns.

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Document Object Identifier (DOI): 10.3386/w25019

 
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