Naive Buying Diversification and Narrow Framing by Individual Investors

• 成果类型: Article; Early Access
• 署名作者: Gathergood, John; Hirshleifer, David; Leake, David; Sakaguchi, Hiroaki; Stewart, Neil
• 署名单位: University of Nottingham; University of Warwick; University of Warwick; University of Nottingham
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13222
• 发表日期: 2023
• 关键词: PROSPECT-THEORY; portfolio choice; attention; overconfidence; experience; PARTICIPATION; underreaction; PSYCHOLOGY; inertia; biases

摘要

We provide the first tests to distinguish whether individual investors equally balance their overall portfolios (naive portfolio diversification, NPD) or, in contrast, equally balance the values of same-day purchases of multiple assets (naive buying diversification, NBD). We find NBD in purchases of multiple stocks, and in mixed purchases of individual stocks and funds. In contrast, there is little evidence of NPD. Evidence suggests that NBD arises due to stock picking behavior and neglect of diversification. These findings suggest that behavioral finance theory should incorporate transaction, as well as portfolio, framing.