Abstract
We administer a survey to thousands of affluent Americans about their personalities and investments. The Big Five personality traits can explain the heterogeneity among investors in their beliefs about the stock market and economy, risk preferences, and social-interaction tendencies. Two personality traits---Neuroticism and Openness---stand out in their explanatory powers for equity investments. Both investors with high Neuroticism and those with low Openness tend to allocate less to equity. While the former behavior is due to pessimism about future stock returns, the latter is due to high risk aversion. We find consistent out-of-sample evidence in a representative panel of Australian households.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
