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Financial Literacy and Portfolio Dynamics

Bianchi, Milo (2018) Financial Literacy and Portfolio Dynamics. Journal of Finance, 73 (2). pp. 831-859.

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Official URL: http://tse-fr.eu/pub/31785

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: Article
Language: English
Date: April 2018
Refereed: Yes
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 03 May 2018 13:28
Last Modified: 24 Jul 2019 11:39
OAI ID: oai:tse-fr.eu:31785
URI: http://publications.ut-capitole.fr/id/eprint/25625

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