Very interesting study on the behaviour of individual investors! It's a bit long, so if you have a short attention span or just don't have the time, look at the conclusions below:
The investors who inhabit the real world and those who populate academic models are distant cousins.In theory, investors hold well diversified portfolios and trade infrequently so as to minimize taxes and other investment costs.In practice, investors be have differently. They trade frequently and have perverse stock selection ability, incurring unnecessary investment costs and return losses.They tend to sell their winners and hold their losers, generating unnecessary tax liabilities. Many hold poorly diversified portfolios, resulting in unnecessarily high levels of diversifiable risk, and many are unduly influenced by media and past experience.Individual investors who ignore the prescriptive advice to buy and hold low-fee, well-diversified portfolios, generally do so to their detriment.