John Gathergood, David Hirshleifer, David Leake, Hiroaki Sakaguchi, Neil Stewart, 22 June 2019

Investors who choose to build their own portfolios by stock-picking face the choice of how to diversify among stocks. The 1/N heuristic, equalising portfolio shares across stocks held, works well in practice. This column shows that investors who buy stocks often employ a different form of 1/N, dividing purchase value equally rather than maintaining a 1/N allocation. By narrowly framing their buy-day decision, these investors move their portfolios farther away from balance.

Tullio Jappelli, Andreas Hackethal, Michalis Haliassos, 24 September 2009

Do financial advisors aid their clients in making wise investments? This column shows that investors who delegate their portfolio management achieve better results. But that’s due to the fact that advisors tend to be matched with richer, older investors. In fact, financial advisors tend to lower returns and raise risk relative to clients who manage their own investment.

Renata Bottazzi, Tullio Jappelli, Mario Padula, 16 September 2009

Pensions reforms are shifting retirement burdens onto private households. How will they respond? This column uses Italian data to show that households better informed about their future entitlements save more for retirement, but private wealth increases considerably less than one-for-one with the social security decreases.

Events

CEPR Policy Research