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Trading Puzzle, Puzzling Trade

Author

Listed:
  • Orhan ERDEM

    (Borsa İstanbul)

  • Evren ARIK

    (Borsa İstanbul)

  • Serkan YÜKSEL

    (Borsa İstanbul)

Abstract

We explore the return performance of individual investors with respect to various factors such as portfolio size, turnover, holding period and also demographic factors: gender and age. We examine the daily trades in Borsa İstanbul (formerly Istanbul Stock Exchange) of 20,000 individual investors over the two year period 2011-2012. Utilizing a weekly data set, we bring new evidence to the current debates on individual investors’ trading patterns. Our findings can be summarized as follows: There is a positive relationship between holding period and return up to a certain level. The return of the individual portfolio is positively correlated with the portfolio size. Almost 70% of all individual investors cannot beat the market. Investors who have high turnover underperform compared to those who have lower turnover. Male investors trade more and lose more vis-à-vis the female and older investors have higher returns.

Suggested Citation

  • Orhan ERDEM & Evren ARIK & Serkan YÜKSEL, 2014. "Trading Puzzle, Puzzling Trade," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 29(345), pages 83-102.
    • Handle: RePEc:iif:iifjrn:v:29:y:2014:i:345:p:83-102
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    More about this item

    Keywords

    Individual Investor; Turnover; Portfolio Size; Stock Returns; Holding Period;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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