Do Individual Investors Trade on Investment-related Internet Postings?
Journal
Management Science
ISSN
0025-1909
Type
journal article
Date Issued
2020-10
Author(s)
Abstract
Many people share investment ideas online. This study investigates whether individual investors trade on investment-related Internet postings. We use unique data from a social trading platform that allow us to observe the shared portfolios of traders, their posted comments, and the replicating transactions of followers. We find robust evidence that followers increasingly replicate shared portfolios of traders after the posting of comments. However, postings do not help followers identify portfolios that deliver superior performance in the future. In a cross-sectional analysis, we show that it is mainly followers who are typically considered to be unsophisticated who trade after comment postings.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
None
Refereed
Yes
Publisher
INFORMS
Publisher place
Catonsville, MD
Number
online first
Subject(s)
Eprints ID
260506
File(s)![Thumbnail Image]()
Name
SocialTrading_InclInternetAppendix.pdf
Size
2.66 MB
Format
Adobe PDF
Checksum (MD5)
f1506e0ba7a0199a8d789e20614351af