Much of the industrialized world is undergoing a significant demographic shift, placing strain on public pension systems. Policymakers are responding with pension system reforms that put more weight on privately managed retirement funds. One concern with these changes is the effect on individual...

Combining monthly survey data with matching trading records, we examine how individual investor perceptions change and drive trading and risk-taking behavior during the 2008-2009 financial crisis. We find that investor perceptions fluctuate significantly during the crisis, with risk tolerance...

Confident investors trade more than less confident investors, but why? Prior research tests the ultimate relation between investor confidence and trading, but does not empirically examine the underlying mechanism that explains why confidence leads to trading. We complement the literature by...

Prior research shows that investors with smaller belief updates trade less actively, which positively affects their return performance. We examine the effect of different default frames of presenting past return information on investors' belief updating. In particular, we analyze whether...

Individual investors' beliefs (return expectations and risk perceptions) drive investment decisions, with larger updates of beliefs leading to more active trading, hurting performance. We examine how framing of past performance information affects investors' belief formation. In particular, we...