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Investor decision making within retirement savings schemes

Author

Listed:
  • Bebbington, Christopher
  • Durand, Robert B.
  • Khuu, Joyce

Abstract

We study the investment allocation decisions of over 32,000 investors in a retirement savings program using data from 1994 to 2019. Investors exhibit a “reduce risk or increase risk response” when faced with signals of increased market volatility. Investors behave as if they perceive patterns in prices. Different age cohorts display different decision-making “cultures”, but all age groups display a bias towards choosing less risky allocations rather than riskier strategies. Our findings suggest that behavioral biases can contribute to lower superannuation balances being available to people when they retire.

Suggested Citation

  • Bebbington, Christopher & Durand, Robert B. & Khuu, Joyce, 2024. "Investor decision making within retirement savings schemes," Pacific-Basin Finance Journal, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:pacfin:v:83:y:2024:i:c:s0927538x23002743
    DOI: 10.1016/j.pacfin.2023.102203
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    More about this item

    Keywords

    Behavioral finance; Retirement savings; Superannuation; Personal finance;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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