Theoretical models predict that overcon�dent investors trade excessively. We test this prediction by partitioning investors on gender. Psychological research demonstrates that, in areas such as �nance, men are more overcon�dent than women. Thus, theory predicts that men will trade more excessively than women. Using account data for over 35,000 households from a large discount brokerage, we analyze the common stock investments of men and women from February 1991 through January 1997. We document that men trade 45 percent more than women. Trading reduces men’s net returns by 2.65 percentage points a year as opposed to 1.72 percentage points for women. It’s not what a man don’t know that makes him a fool, but what he does know that ain’t so. Josh Billings, nineteenth century American humorist It is dif�cult to reconcile the volume of trading observed in equity markets with the trading needs of rational investors. Rational investors make periodic contributions and withdrawals

may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Do Spouses Coordinate Their Investment Decisions in Order to Share Risks? This paper uses the 1995 and 1998 Survey of Consumer Finances to examine 401(k) asset allocation behavior by individual and household characteristics, including spousal asset allocation behavior. The results provide evidence that, among married households in which each spouse has a 401(k) plan, spouses tend to invest their 401(k)s similarly rather than diversifying their holdings across spouses to share risks. The findings also point to the lack of diversification between 401(k) asset allocations and other household holdings. However, the results suggest that households can diversify in other ways, such as through a spouse’s earnings or through having an underlying defined benefit plan. Do Spouses Coordinate Their Investment Decisions in Order to Share Risks? The dramatic growth in defined contribution (DC) plan participation shifts much of the asset allocation responsibility and investment risk from employers to workers. As individuals

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Earlier literature on gender and risk-taking based on US data has found women to be more conservative investors (see e.g Jianakoplos & Bernasek, 1998, for savings; Sundén & Surette, 1998, for retirement savings). The purpose of the present paper is to test empirically whether this holds good, when all background risks are taken into account. I use a unique data on premium pension portfolio choices for 11 000 individuals, eligible in a new public defined-contribution pension system that was initiated in Sweden in 2000, matched with the Swedish Household Survey on Income for 1999. Unlike previous studies, the current data does not suffer from any particular job/occupational selection, and it covers a wider range of income distribution. Further, I use a more refined definition of risk (which is commonly defined as the share of stocks), namely the average standard deviation of a fund’s performance for the three preceding years. Thus the risk measure used here is more accurate, as well as taking into account that, even with a low share of stocks, funds can be considerably risky. The findings of this paper suggest that almost all individuals chose a fairly aggressive investment strategy with almost the whole portfolio invested in stock funds. As in earlier

This study develops three heuristics to measure financial optimism: financial expectation, a priori optimism, and a posteriori optimism. This paper finds that financial optimism has a significant positive effect on risk taking behaviour. Optimistic investors choose risky portfolios over risk-free portfolios for their investments and have higher personal debt borrowing. We use more than six million observations from the British Household Panel Survey covering the period 1991 to 2007 in our analysis. Optimistic, pessimistic and neural respondents have significantly different demographic characteristics. Optimists are significantly younger, more likely being male, have higher educational qualifications, more likely to have business ownership, borrow more personal debt and take on a larger mortgage than pessimists. However they also have a lower accumulated financial wealth and higher average unemployment rate than people who are pessimistic or neutral towards their financial situation. 2