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- Title
Mislearning and (poor) performance of individual investors.
- Authors
Villatoro, Félix; Fuentes, Olga; Riutort, Julio; Searle, Pamela
- Abstract
We study individuals' incentives to make investment decisions. Using data from a large pension system in Chile we find that individuals who are active in managing their investments have, on average, poor performance. We provide robust evidence suggesting that learning plays an important part in this phenomenon. Indeed, individuals who have made successful investment decisions in the past go on to trade more frequently. However, this result holds when using a naive definition for successful decisions. Also, average performance is negatively related to the number of investment decisions, casting doubt on the existence of market timing skills.
- Subjects
CHILE; INDIVIDUAL investors; DECISION making in investments; MARKET timing
- Publication
Journal of Pension Economics & Finance, 2024, Vol 23, Issue 1, p30
- ISSN
1474-7472
- Publication type
Article
- DOI
10.1017/S147474722200018X