Foreign investments of US individual investors: Causes and consequences

• 成果类型: Article
• 署名作者: Bailey, Warren; Kumar, Alok; Ng, David
• 署名单位: Cornell University; University of Texas System; University of Texas Austin; Cornell University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1070.0793
• 发表日期: 2008
• 页码: 443-459
• 关键词: individual investors; Behavioral biases; Foreign investments; diversification; speculation

摘要

Using thousands of brokerage accounts of U.S. individual investors, we analyze the motivations and consequences of foreign equity investment. We find that diversification is not the only reason that investors trade foreign securities. While wealthier, more experienced investors enjoy an informational advantage and, thus, are more likely to invest overseas and experience good portfolio performance, other investors appear to venture. abroad for the wrong reasons. In particular, behaviorally biased investors often underuse or misuse foreign equity securities and experience poor portfolio performance. Some investors appear to use foreign securities for speculation or to improve upon poor domestic portfolio performance.