Abstract: We survey a representative sample of Finnish individual investors to rank the importance of 37 factors in equity allocation and compare the results to a recent US study (Choi and Robertson, Journal of Finance, 2020). US investors cite saving for retirement and hedging labour income, home value, health, and rare disaster risks as most important equity allocation factors. In contrast, Finnish investors put more emphasis on the media, the belief that stock markets mean-revert, their personal experiences, and short-term return expectations and consumption needs. Compared to their US peers, Finnish individual investors thus perceive the stock market more as a game in which one can either win or lose, and less as an instrument for retirement saving and insuring against lifetime shocks. These different attitudes are likely to reflect the differences in social welfare policies between these two countries.

Authors: 

Matthijs Lof (Aalto University)
Elias Rantapuska (Aalto University)
Alexander Wirtz (Ernst and Young)

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in both onsite and online format, unless announced otherwise. The presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. Copies of the paper are usually made available at the seminar. The DEF seminar series is organised in collaboration with the project ”Individual Behaviour and Economic  Performance: Methodological  Challenges and Institutional Context” (IBEP), which has received funding from the European Union’s Horizon 2020 Research and Innovation programme under Grant Agreement No 952574. Questions about the seminar can be sent to the IBEP seminar coordinator Kadri Männasoo, kadri.mannasoo@taltech.ee.