Millionaires speak: What drives their personal investment decisions?

Bender, Svetlana; Choi, James J.; Dyson, Danielle; Robertson, Adriana

doi:10.1016/j.jfineco.2021.09.016

Cited by 27 publications

(15 citation statements)

References 202 publications

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“…While respondent age is relatively high, the effects we find should plausibly generalize to younger cohorts. In particular, the related studies of Choi and Robertson (2020) and Bender et al (2022) show that demographics like age and wealth are largely orthogonal to what drives investment decisions. Furthermore, our results generally line up well with studies whose sample age distributions differ from ours, including recent work by Changwony et al (2021) and Fey et al (2021) .…”

Section: Introductionmentioning

confidence: 99%

What drives stock market participation? The role of institutional, traditional, and behavioral factors

Kaustia

Conlin

Luotonen

2023

Journal of Banking & Finance

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Section: Introductionmentioning

confidence: 99%

What drives stock market participation? The role of institutional, traditional, and behavioral factors

Kaustia

Conlin

Luotonen

2023

Journal of Banking & Finance

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“…It has been well documented that investors' financial situations, including wealth and income, are positively related to stock investment (Bender et al. , 2022; Lei and Salazar, 2021).…”

Section: Methodsmentioning

confidence: 99%

“…It has been well documented that investors' financial situations, including wealth and income, are positively related to stock investment (Bender et al, 2022;Lei and Salazar, 2021). Homeownership also plays a role in shaping stock investment decisions (Beracha et al, 2017;Chetty et al, 2017).…”

Section: Empirical Modelsmentioning

confidence: 99%

Familiarity bias in direct stock investment by individual investors

Lei,

Mathers

2023

RBF

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PurposeThis study examines the relationship between investors' familiarity bias, including the home bias and endowment bias, and their financial situations, expectations and personal characteristics.Design/methodology/approachUsing the 2019 Survey of Consumer Finances, the authors utilize an ordinary least squares regression to identify the presence of endowment bias and home bias in individual investors' direct stock holdings and use a Heckman selection model to examine determinants of the extent of endowment bias and home bias.FindingsThis study finds that investors with higher income and more education, men, non-white investors and people with greater risk tolerance are actually at a greater risk of endowment bias. This study also identifies a profile of investors that are more likely to have a home bias: with less financial sophistication, lower net worth, older, female, more risk-averse, with a positive expectation about the domestic economy and a relatively shorter investment horizon.Originality/valueThis paper is among the first to use US investors' directly reported stock holdings to examine the individual characteristics that are correlated with greater familiarity bias, providing financial professionals with information about how to allocate their limited time in providing education to a variety of clients.

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“…If this selectivity exists and individuals are unsure if their peers participate in the market, communication not only discloses the outcome but also the status of their peers’ participation(Feld & Zölitz, 2015) [ 53 ]. If individuals are worried about their personal wealth in comparison to their peers, this can encourage them to participate in the market (Svetlana et al, 2022) [ 54 ].…”

Section: Data and Empirical Specificationmentioning

confidence: 99%

The peer effects of resident stock market participation: Evidence from 2019 CHFS

Lin,

Kong,

et al. 2024

PLoS ONE

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Limited resident’s participation in the stock market has become a key constraint to the capital market development. Utilizing the 2019 China Household Financial Survey (CHFS) data, our paper designs probit models to examine the peer effects of residents’ stock market participation and explore the intermediary mechanisms with a multiple intermediary model. We find that: (1) Resident involvement in stock market decision-making exhibits significant peer effects. (2) Heterogeneity analysis reveals that males and rural residents display more pronounced peer effects than females and urban residents. Additionally, middle-aged residents demonstrate more potent peer effects than their younger and older counterparts, with the intensity of peer effects correlating with education levels. (3)We observe that the peer effects of market participation operate by altering economic expectations and enhancing residents’ financial literacy. (4) Further investigation establishes that individuals engaging in stock market investments manifest peer effects when deciding whether to diversify their stock portfolio. This study holds reference value for analyzing the impact of social interaction on financial behaviors and regulating individuals’ financial conduct.

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Millionaires speak: What drives their personal investment decisions?

Cited by 27 publications

References 202 publications

What drives stock market participation? The role of institutional, traditional, and behavioral factors

What drives stock market participation? The role of institutional, traditional, and behavioral factors

Familiarity bias in direct stock investment by individual investors

The peer effects of resident stock market participation: Evidence from 2019 CHFS

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