You Only Watch When You’re Winning: Selective Attention Among Individual Investors

We study the allocation of attention to investment accounts among a large sample of individual investors. Investors login to view their accounts on average ten times more frequently than they trade, implying that login behavior is not primarily driven by trading activity. More diversified investors login less often, as do female investors. Results from two natural experiments in the data are consistent with investor attention to their accounts begin driven by hedonic utility. First, after a buy trade investors who experience losses are less likely to login than those who experience gains, consistent with investors avoiding negative hedonic utility from observing the losses. Second, investors are less likely to login on unexpectedly sunny days, consistent with investors substituting towards other leisure activities when the opportunity cost of paying attention to their accounts is high.