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Investment horizon and portfolio choice of private investors

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  • Veld-Merkoulova, Yulia V.

Abstract

I empirically investigate the impact of age and self-reported planning horizon on asset allocation decisions of individual investors. I find that age and investment horizon play different roles in determining investors' risky portfolios. When I consider total risky investments, including real estate, the share of risky assets declines with age. Planning horizon tends to influence only investments in financial risky assets, such as stocks, options, and mutual funds. A longer planning horizon leads to an increasing share of risky financial investments. Finally, less risk-averse investors and individuals with lower rate of time preference invest significantly more in stocks and other risky financial assets.

Suggested Citation

  • Veld-Merkoulova, Yulia V., 2011. "Investment horizon and portfolio choice of private investors," International Review of Financial Analysis, Elsevier, vol. 20(2), pages 68-75, April.
  • Handle: RePEc:eee:finana:v:20:y:2011:i:2:p:68-75
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    References listed on IDEAS

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    Cited by:

    1. Alexandra Spicer & Olena Stavrunova & Susan Thorp, 2016. "How Portfolios Evolve after Retirement: Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 92(297), pages 241-267, June.
    2. Lee, Boram & Rosenthal, Leonard & Veld, Chris & Veld-Merkoulova, Yulia, 2015. "Stock market expectations and risk aversion of individual investors," International Review of Financial Analysis, Elsevier, vol. 40(C), pages 122-131.
    3. repec:eee:finana:v:56:y:2018:i:c:p:52-72 is not listed on IDEAS
    4. Lee, Boram & Veld-Merkoulova, Yulia, 2016. "Myopic loss aversion and stock investments: An empirical study of private investors," Journal of Banking & Finance, Elsevier, vol. 70(C), pages 235-246.
    5. Susan Black & Lamorna Rogers & Albina Soultanaeva, 2012. "Households' Appetite for Financial Risk," RBA Bulletin, Reserve Bank of Australia, pages 37-42, June.

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