Who holds foreign stocks and bonds?
Characteristics of active investors in foreign securities
DOI:
https://doi.org/10.61190/fsr.v18i1.4932Keywords:
Foreign investments, Individual investors, Home biasAbstract
We study the behavior of active individual investors who hold foreign stocks and bonds directly. Using the Survey of Consumer Finances, we determine the demographic, financial, and behavioral characteristics that predict the likelihood of direct investments in foreign stocks and bonds. Our main findings are: (1) while aggregate data indicate substantial home bias, within the group of active individual investors in foreign stocks, there is no evidence of home bias, and (2) age, financial wealth, and proxies for investor confidence are positively related to direct ownership of foreign stocks and bonds, while proxies for lack of financial sophistication have a negative effect.
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