European Finance Association’s Post

Most cited paper "Equity Portfolio Diversification" by William N. Goetzmann and Alok Kumar in Review of Finance, Volume 12, Issue 3, 2008, Pages 433–463, https://lnkd.in/dD64A-s Published: 28 March 2008 Abstract This study shows that U.S. individual investors hold under-diversified portfolios, where the level of under-diversification is greater among younger, low-income, less-educated, and less-sophisticated investors. The level of under-diversification is also correlated with investment choices that are consistent with over-confidence, trend-following behavior, and local bias. Furthermore, investors who over-weight stocks with higher volatility and higher skewness are less diversified. In contrast, there is little evidence that portfolio size or transaction costs constrains diversification. Under-diversification is costly to most investors, but a small subset of investors under-diversify because of superior information. JEL G11 - Portfolio Choice; Investment DecisionsG12 - Asset Pricing; Trading volume; Bond Interest Rates Oxford University Press OUP Academic Yale School of Management Texas McCombs School of Business European Finance Association

Most cited paper "Equity Portfolio Diversification" by William N. Goetzmann and Alok Kumar in Review of Finance

Most cited paper "Equity Portfolio Diversification" by William N. Goetzmann and Alok Kumar in Review of Finance

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Sourav Prasad

PhD Candidate @ IIMBG | IIMB | IIMC

1mo

Congratulations, Prof. Alok Kumar and Prof. William N. Goetzmann. 🎉🎉🎉

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