Korniotis, George M.; Kumar, Alok - In: Journal of Financial and Quantitative Analysis 48 (2013) 01, pp. 1-45
Using a demographics-based proxy for smartness, we show that the portfolio distortions of “smart” investors reflect an informational advantage, while the distortions of “dumb” investors reflect psychological biases. Specifically, smart investors outperform dumb investors by about 3%...