Publicação
Industry preference of retail investors during covid-19: evidence from robinhood
| Resumo: | This paper analyses how retail investors of Robinhood rearranged their portfolios across industries because of Covid-19, and what factors influenced their investment decisions. The analysis includes stock liquidity, historical beta, information display on Robinhood, and large one-day price movements to understand the changes in industry allocation. Retail investors, compared to a value-weighted portfolio, underinvested in industries with increasing market value following the Covid-19 Dow Jones crash, and overinvested in those with decreasing market value. A preference for high liquidity and low Price/Earnings-ratio stocks explains above 20% of the change in industry allocation, except in the Energy and Consumer Discretionary industries. |
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| Autores principais: | Freire, Francisco Rosa Faria Mendonça |
| Assunto: | Retail investors Covid-19 Industry Attention-induced trading Robinhood |
| Ano: | 2023 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | This paper analyses how retail investors of Robinhood rearranged their portfolios across industries because of Covid-19, and what factors influenced their investment decisions. The analysis includes stock liquidity, historical beta, information display on Robinhood, and large one-day price movements to understand the changes in industry allocation. Retail investors, compared to a value-weighted portfolio, underinvested in industries with increasing market value following the Covid-19 Dow Jones crash, and overinvested in those with decreasing market value. A preference for high liquidity and low Price/Earnings-ratio stocks explains above 20% of the change in industry allocation, except in the Energy and Consumer Discretionary industries. |
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