American Economic Review Vol. 93 No. 1 2003

Portfolio Choice and Trading in a Large 401(k) Plan

Julie R. Agnew¹; Pierluigi Balduzzi²; Annika Sundén³

¹ School of Business Administration, College of William and Mary, P.O. Box 8795, Williamsburg, VA 23187. · ² Finance Department, Wallace E. Carroll School of Management, Fulton Hall, Boston College, 140 Commonwealth Avenue, Chestnut Hill, MA 02467. · ³ Center for Retirement Research, Fulton Hall 550, Boston College, Chestnut Hill, MA 02467.

Abstract

We study nearly 7,000 retirement accounts during the April 1994–August 1998 period. Several interesting patterns emerge. Most asset allocations are extreme (either 100 percent or zero percent in equities) and there is inertia in asset allocations. Equity allocations are higher for males, married investors, and for investors with higher earnings and more seniority on the job; equity allocations are lower for older investors. There is very limited portfolio reshuffling, in sharp contrast to discount brokerage accounts. Daily changes in equity allocations correlate only weakly with same-day equity returns and do not correlate with future equity returns.

DOI

10.1257/000282803321455223

Volume

93

Issue

1

Pages

193-215

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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