Matti Keloharju's paper accepted for publication in the Journal of Financial Economics
20.06.2011
Article "IQ, trading behavior, and performance" by Mark Grinblatt (UCLA), Matti Keloharju and Juhani Linnainmaa (Chicago Booth) has been accepted for publication in the Journal of Financial Economics.
Abstract
We analyze whether IQ influences trading behavior, performance, and transaction costs. The analysis combines equity return, trade, and limit order book data with two decades of scores from an intelligence test administered to nearly every Finnish male of draft age. Controlling for a variety of factors, we find that high-IQ investors are less subject to the disposition effect, more aggressive about tax-loss trading, and more likely to supply liquidity when stocks experience a one-month high. High-IQ investors also exhibit superior market timing, stock-picking skill, and trade execution.
Information:
Download the article here.