Toulouse 1 Capitole Publications

Financial Literacy and Portfolio Dynamics

Bianchi, Milo (2017) Financial Literacy and Portfolio Dynamics. TSE Working Paper, n. 17-808, Toulouse

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Official URL: http://tse-fr.eu/pub/31731

Abstract

We match administrative panel data on portfolio choices with survey measures of financial literacy. When we control for portfolio risk, the most literate households experience 0.4% higher annual returns than the least literate households. Distinct portfolio dynamics are the key determinant of this difference. More literate households hold riskier positions when expected returns are higher. They more actively rebalance their portfolios and do so in a way that holds their risk exposure relatively constant over time. They are more likely to buy assets that provide higher returns than the assets that they sell.

Item Type: Monograph (Working Paper)
Language: English
Date: May 2017
Place of Publication: Toulouse
Subjects: B- ECONOMIE ET FINANCE
Divisions: Toulouse School of Economics - TSE
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 18 May 2017 14:03
Last Modified: 18 May 2017 14:03
OAI ID: oai:tse-fr.eu:31731
URI: http://publications.ut-capitole.fr/id/eprint/24081

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