Does financial education help to improve the return on stock investment? Evidence from China

Abstract

Individual investors are important capital market participants, and improving their financial welfare has been a long-standing objective for policymakers and researchers. Using the data from a national survey on individual investor behavior in China, we explore the relationship between individual investors' financial education attainment and the performance of their stock portfolios. The results show that individual investors who receive financial education are more likely to increase their profits in the stock market because they have good investment habits and elevate theirare more risk tolerant. Further, financial education demonstrates a greater effect on stock market profit making among investors with less experienced and from areas with lower levels of investor protection.