This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. March 2003
  5. Portfolio Choice and Trading in a Large 401(k) Plan

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Portfolio Choice and Trading in a Large 401(k) Plan

  • Julie Agnew
  • Pierluigi Balduzzi
  • Annika Sundén
American Economic Review
vol. 93, no. 1, March 2003
(pp. 193–215)
Download Full Text PDF

Abstract

We study nearly 7,000 retirement accounts during the April 1994-August 1998 period. Several interesting patterns emerge. Most asset allocations are extreme (either 100 percent or zero percent in equities) and there is inertia in asset allocations. Equity allocations are higher for males, married investors, and for investors with higher earnings and more seniority on the job; equity allocations are lower for older investors. There is very limited portfolio reshuffling, in sharp contrast to discount brokerage accounts. Daily changes in equity allocations correlate only weakly with same-day equity returns and do not correlate with future equity returns.

Citation

Agnew, Julie, Pierluigi Balduzzi, and Annika Sundén. 2003. "Portfolio Choice and Trading in a Large 401(k) Plan ." American Economic Review, 93 (1): 193–215. DOI: 10.1257/000282803321455223

JEL Classification

  • G11 Portfolio Choice; Investment Decisions