Remember me

Register  |   Lost password?


Introduction to QuantLib Development - Intensive 3-day Training Course - September 10-12th, 2018 - Download Registration Form Here

 

Journal of Finance Header


Financial Literacy and Portfolio Dynamics

Sat, 16 Dec 2017 22:58:20 GMT

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, and they are more likely to buy assets that provide higher returns than the assets that they sell.

This article is protected by copyright. All rights reserved