Individual Investor Activity and performance

Item Type Journal paper
Abstract

We examine the daily activity and performance of a large panel of individual investors in Sweden's Premium Pension System. We find that active investors earn higher returns and risk-adjusted returns than inactive investors. A performance decomposition analysis reveals that most of the outperformance of active investors is the result of these investors successfully timing mutual funds and asset classes. While activity is beneficial for some investors, extreme flows out of mutual funds affect funds' net asset values negatively for all investors. Financial advisors, by contributing to coordinate investments and redemptions, exacerbate these negative effects.

Authors Dahlquist, Magnus; Martinez, José Vincente & Söderlind, Paul
Journal or Publication Title The Review of Financial Studies
Language English
Keywords 401(k), coordinated fund changes, defined contribution, financial advisors, mutual fund flows
Subjects economics
finance
Institute/School s/bf - Swiss Institute of Banking and Finance
HSG Classification contribution to scientific community
Refereed No
Date 7 November 2016
Publisher Oxford Univ. Press
Place of Publication Cary, NC
Volume 30
Number 3
Page Range 866-899
Number of Pages 33
ISSN 0893-9454
ISSN-Digital 1465-7368
Publisher DOI 10.1093/rfs/hhw093
Depositing User Prof. PhD. Paul Söderlind
Date Deposited 05 May 2014 12:16
Last Modified 22 Mar 2017 15:26
URI: https://www.alexandria.unisg.ch/publications/231425

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Citation

Dahlquist, Magnus; Martinez, José Vincente & Söderlind, Paul (2016) Individual Investor Activity and performance. The Review of Financial Studies, 30 (3). 866-899. ISSN 0893-9454

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https://www.alexandria.unisg.ch/id/eprint/231425
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