The Library
Naïve diversification and narrow framing among individual investors
Tools
Gathergood, John, Hirshleifer, D. A., Leake, David, Sakaguchi, Hiroaki and Stewart, Neil (2023) Naïve diversification and narrow framing among individual investors. The Journal of Finance , 78 (3). pp. 1705-1741. doi:10.1111/jofi.13222 ISSN 0022-1082.
|
PDF
WRAP-Naïve-diversification-narrow-framing-individual-investors-22..pdf - Published Version - Requires a PDF viewer. Available under License Creative Commons Attribution 4.0. Download (921Kb) | Preview |
|
PDF
WRAP-Naïve-diversification-narrow-framing-individual-investors-22.pdf - Accepted Version Embargoed item. Restricted access to Repository staff only - Requires a PDF viewer. Download (857Kb) |
Official URL: https://doi.org/10.1111/jofi.13222
Abstract
We provide the first tests to distinguish whether individual investors equally balance their overall portfolios (naïve portfolio diversification, NPD) or, in contrast, equally balance the values of same-day purchases of multiple assets (naïve buying diversification, NBD). We find NBD in purchases of multiple stocks, and in mixed purchases of individual stocks and funds. In contrast, there is little evidence of NPD. Evidence suggests that NBD arises due to stock picking behavior and neglect of diversification. These findings suggest that behavioral finance theory should incorporate transaction, as well as portfolio, framing.
Item Type: | Journal Article | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Subjects: | H Social Sciences > HG Finance | |||||||||||||||
Divisions: | Faculty of Science, Engineering and Medicine > Science > Psychology Faculty of Social Sciences > Warwick Business School |
|||||||||||||||
Library of Congress Subject Headings (LCSH): | Investments, Investments -- Psychological aspects, Portfolio management -- Mathematical models, Financial risk, Investment analysis -- Mathematical models | |||||||||||||||
Journal or Publication Title: | The Journal of Finance | |||||||||||||||
Publisher: | Wiley-Blackwell Publishing, Inc. | |||||||||||||||
ISSN: | 0022-1082 | |||||||||||||||
Official Date: | June 2023 | |||||||||||||||
Dates: |
|
|||||||||||||||
Volume: | 78 | |||||||||||||||
Number: | 3 | |||||||||||||||
Page Range: | pp. 1705-1741 | |||||||||||||||
DOI: | 10.1111/jofi.13222 | |||||||||||||||
Status: | Peer Reviewed | |||||||||||||||
Publication Status: | Published | |||||||||||||||
Access rights to Published version: | Open Access (Creative Commons) | |||||||||||||||
Copyright Holders: | © 2023 The Authors. The Journal of Finance published by Wiley Periodicals LLC on behalf of American Finance Association. | |||||||||||||||
Date of first compliant deposit: | 18 October 2022 | |||||||||||||||
Date of first compliant Open Access: | 18 October 2022 | |||||||||||||||
RIOXX Funder/Project Grant: |
|
|||||||||||||||
Related URLs: | ||||||||||||||||
Open Access Version: |
Request changes or add full text files to a record
Repository staff actions (login required)
View Item |
Downloads
Downloads per month over past year