Do Market Returns Influence Risk Tolerance? Evidence from Panel Data

TitleDo Market Returns Influence Risk Tolerance? Evidence from Panel Data
Publication TypeJournal Article
Year of Publication2011
AuthorsYao, R, Curl, AL
JournalJournal of Family and Economic Issues
Volume32
Issue3
Pagination532
KeywordsConsumption and Savings, Other, Retirement Planning and Satisfaction, Risk Taking
Abstract

This study used the 1992-2006 waves of the Health and Retirement Study (HRS) to investigate changes in risk tolerance levels over time in response to stock market returns. Findings indicate that risk tolerance tends to increase when market returns increase and decrease when market returns decrease. Individuals who change their risk tolerance in this manner are likely to invest in stocks when prices are high and sell when prices are low. Researchers, employers, financial educators and practitioners should help investors overcome the bias of overweighting recent news of market performance. PUBLICATION ABSTRACT

URLhttp://proquest.umi.com.proxy.lib.umich.edu/pqdweb?did=2416617571andFmt=7andclientId=17822andRQT=309andVName=PQD
Endnote Keywords

Studies/Risk assessment/Return on investment/Retirement planning

Endnote ID

62572

Citation Key7597