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Online Broker Investors: Demographic Information, Investment Strategy, Portfolio Positions, and Trading Activity

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  • Glaser, Markus

    () (Sonderforschungsbereich 504)

Abstract

It is often argued that the internet influences investor behavior. Furthermore, the recent 'bubble' in internet stocks is sometimes ascribed, at least in part, to online trading. However, little is known about how online investors actually behave. This paper contributes to fill this gap. A sample of approximately 3,000 online broker investors is studied over a 51 month period ending in April 2001. The main goal of this paper is to present various descriptive statistics on demographic information, investment strategy, portfolio positions, and trading activity. The main results of this paper can be summarized as follows. Online broker investors trade frequently. The median stock portfolio turnover is about 30 % per month. The average number of stocks in portfolios increases over time suggesting that, ceteris paribus, diversification increases. Trading activity is tilted towards technology, software, and internet stocks. About half of the investors in our sample trade warrants and half of the transactions of all investors are purchases and sales of foreign stocks. Income and age are negatively and the stock portfolio value is positively related to the number of stock transactions. Warrant traders buy and sell significantly more stocks than investors who do not trade warrants. Warrant traders and investors who describe their investment strategy as high risk have higher stock portfolio turnover values whereas the opposite is true for investors who use their online account mainly for retirement savings. The stock portfolio value is negatively related to turnover. The higher the stock portfolio value, the higher the average trading volume per stock market transaction.

Suggested Citation

  • Glaser, Markus, 2003. "Online Broker Investors: Demographic Information, Investment Strategy, Portfolio Positions, and Trading Activity," Sonderforschungsbereich 504 Publications 03-18, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  • Handle: RePEc:xrs:sfbmaa:03-18
    Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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    File URL: http://www.sfb504.uni-mannheim.de/publications/dp03-18.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ying Zhang & Peggy Swanson, 2010. "Are day traders bias free?—evidence from internet stock message boards," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 34(1), pages 96-112, January.
    2. Glaser, Markus & Weber, Martin, 2009. "Which past returns affect trading volume?," Journal of Financial Markets, Elsevier, vol. 12(1), pages 1-31, February.
    3. Abreu, Margarida & Mendes, Victor, 2012. "Information, overconfidence and trading: Do the sources of information matter?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 868-881.
    4. Markus Glaser & Martin Weber, 2007. "Overconfidence and trading volume," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 32(1), pages 1-36, June.
    5. Weber, Martin & Welfens, Frank, 2007. "The Repurchase Behavior of Individual Investors: An Experimental Investigation," Sonderforschungsbereich 504 Publications 07-44, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    6. Weber, Martin & Welfens, Frank, 2007. "An Individual Level Analysis of the Disposition Effect: Empirical and Experimental Evidence," Sonderforschungsbereich 504 Publications 07-45, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    7. Shaneera Boolell-Gunesh, 2008. "Un portrait de l?investisseur individuel français," Working Papers of LaRGE Research Center 2008-12, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.

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