Wealth heterogeneity, information acquisition and equity home bias: Evidence from U.S. household surveys of consumer finance

Carpio, Ronaldo; Guo, Meixin; Liu, Yuan; Pyun, Ju Hyun

doi:10.1016/j.jbankfin.2021.106100

Cited by 7 publications

(1 citation statement)

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“…By the methodology of event study, they also proposed that the high returns of wealthy individual investors can be attributed to their information network advantages to a certain extent. Carpio et al (2021) [32] revealed that wealthy investors are more likely to participate in foreign stock markets, but as investor wealth increases, the portfolio share invested in foreign equities tends to decrease. Bender et al (2022) [33] discovered that wealthy investors' equity share is most affected by professional advice, time until retirement, personal experiences, rare disaster risk, and health risk.…”

Section: Plos Onementioning

confidence: 99%

Wealthy individual investors and stock markets’ tail risk

Yu,

Lu,

Yang

et al. 2024

PLoS ONE

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This paper employs a unique data set to analyze the trading behavior of wealthy individual investors across Mainland China and their impact on Chinese stock markets’ tail risk. Results show that the wealthy individual investors’ trading behavior can explain Chinese stock markets’ tail risk, and the daily investment portfolios based on the network density of wealthy individual investors have significant excess returns. This paper also investigates the determinants of wealthy individual investors’ trading behavior with the social network method and the spatial econometric model, and reveals that wealthy individuals benefit from the spillover effect of their trading behavior through the investor networks. The results of this paper not only reveal micro evidence for the formation mechanism of asset prices, but also provide insight into the behavior of wealthy individual investors.

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