Financial Literacy and Portfolio Dynamics

Milo Bianchi

No 17-808, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We match administrative panel data on portfolio choices with survey measures of financial literacy. When we control for portfolio risk, the most literate households experience 0.4% higher annual returns than the least literate households. Distinct portfolio dynamics are the key determinant of this difference. More literate households hold riskier positions when expected returns are higher. They more actively rebalance their portfolios and do so in a way that holds their risk exposure relatively constant over time. They are more likely to buy assets that provide higher returns than the assets that they sell.

Date: 2017-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... /2017/wp_tse_808.pdf Full text (application/pdf)

Related works:
Journal Article: Financial Literacy and Portfolio Dynamics (2018)
Working Paper: Financial Literacy and Portfolio Dynamics (2018)
Working Paper: Financial Literacy and Portfolio Dynamics (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:31731

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().