Patterns of Investment Strategy and Behavior Among Individual Investors

Abstract

In recent years, a substantial amount of attention has been directed in the literature of economics and finance to the question of the investment behavior and portfolio performance of institutional investors.' Those investigations are natural ones, both because the relevant portfolio data are reasonably accessible and because the institutions involved are rapidly growing accumulators and traders of corporate equity securities. The traditional bulwark of the American equity marketplace-the individual investor-however, has been an object of scrutiny only in very aggregative terms. The trend of his apparent withdrawal from direct market participation has been amply documented,2 and the appropriate alarums expressed,3 but the causes of that phenomenon remain almost entirely conjectural. Indeed, virtually all