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Industry preference of retail investors during covid-19: evidence from robinhood
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Orientador(es)
Resumo(s)
This paper analyses how retail investors of Robinhood rearranged their portfolios across
industries because of Covid-19, and what factors influenced their investment decisions. The
analysis includes stock liquidity, historical beta, information display on Robinhood, and large
one-day price movements to understand the changes in industry allocation. Retail investors,
compared to a value-weighted portfolio, underinvested in industries with increasing market
value following the Covid-19 Dow Jones crash, and overinvested in those with decreasing
market value. A preference for high liquidity and low Price/Earnings-ratio stocks explains
above 20% of the change in industry allocation, except in the Energy and Consumer
Discretionary industries.
Descrição
Palavras-chave
Retail investors Covid-19 Industry Attention-induced trading Robinhood