The Quarterly Journal of Economics · 2001 · 5.3K citations · 68 references
BusinessEconomicsFinanceBehavioral EconomicsFinancial EconomicsFinancial MarketsBehavioral Asset PricingCapital MarketsCognitive Biases In InvestingFinancial RiskInvestor PsychologyRisk-return AnalysisBehavioral Investment DecisionsBrokerageCommon Stock Price ImpactCommon Stock ReportingDiscount BrokerageIndividual Investor PerformanceInvestor OverconfidenceInvestor Trading Behavior
Theoretical models and psychological research suggest that overconfident investors trade excessively, with men exhibiting greater overconfidence than women, implying men should trade more than women. We test this prediction by partitioning investors on gender. Using account data for over 35,000 households from a large discount brokerage, we analyze the common stock investments of men and women from February 1991 through January 1997. Men trade 45 percent more than women, and their higher trading activity reduces net returns by 2.65 percentage points per year compared to 1.72 percentage points for women.
Theoretical models predict that overconfident investors trade excessively. We test this prediction by partitioning investors on gender. Psychological research demonstrates that, in areas such as finance, men are more overconfident than women. Thus, theory predicts that men will trade more excessively than women. Using account data for over 35,000 households from a large discount brokerage, we analyze the common stock investments of men and women from February 1991 through January 1997. We document that men trade 45 percent more than women. Trading reduces men's net returns by 2.65 percentage points a year as opposed to 1.72 percentage points for women.
68
Common risk factors in the returns on stocks and bonds
Eugene F. Fama, Kenneth R. French · Journal of Financial Economics · 1993 · 27.7K citations
Judgment under Uncertainty: Heuristics and Biases
Amos Tversky, Daniel Kahneman · 1975 · 23.1K citations
On Persistence in Mutual Fund Performance
Mark M. Carhart · The Journal of Finance · 1997 · 17K citations · Full text
Journal of personality and social psychology
Jane Armstrong · International Journal of Forecasting · 1988 · 10.6K citations