An experiment on the impacts of experiential investment advice.

ABSTRACT: An experiment is conducted in which investment advice is passed from one cohort to the next. Participants make asset allocation decisions for thirty years to a safe and risky asset and provide annual forecasts (beliefs) on the return on the risky asset. Risky asset returns are drawn from the price returns on the S&P 500 from 1921-2010; Cohorts 1/2/3 received the actual returns in the time period from 1921-1950/1951-1980/1981-2010 respectively. Results show that negative investment advice passed from Cohort 1 to Cohort 2 leads to: 1) significantly lower allocations to the risky asset in Cohort 2 compared to Cohort 1; and 2) a 19% difference in allocations between cohorts who received either positive advice or negative advice in Cohort 2. A second experiment examines the effect on Cohort 3 f

SUBMITTER: Ridinger G 

PROVIDER: S-EPMC12923020 | biostudies-literature | 2026

REPOSITORIES: biostudies-literature