Do Older Investors Make Better Investment Decisions?
Year: 2010
Type: article
Study design: Observational Study
Abstract: This paper examines the investment decisions of older individual investors. We find that older and experienced investors are more likely to follow rules of thumb that reflect greater investment knowledge. However, older investors are less effective in applying their investment knowledge and exhibit worse investment skill, especially if they are less educated, earn lower income, and belong to minority racial/ethnic groups. Overall, the adverse effects of aging dominate the positive effects of experience. These results indicate that older investors' portfolio decisions reflect greater knowledge about investing, but investment skill deteriorates with age due to the adverse effects of cognitive aging.
DOI: 10.1162/rest_a_00053
Authors: George M Korniotis, Alok Kumar
Institutions: University of Miami, The University of Texas at Austin
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2089845703