Summary of Stock Market Investment
The Role of Human Capital
Federal Reserve Board, 2015
This cutting-edge study seeks to explain why people don’t invest in stocks as much as theory says they should.
In this pioneering analysis, economists Kartik Athreya, Felicia F. Ionescu and Urvi Neelakantan explain why people invest in equity markets at much lower rates than financial theory and portfolio analysis projections suggest they should. What those predictions overlook, according to the authors, is the opportunity young adults have to invest in themselves through education, rather than in risky financial assets such as stocks. Economists, statisticians and other quantitatively skilled readers will appreciate this report’s rigorous analysis, but others may find this mathematically intensive study a tough slog. Nonetheless, getAbstract suggests this notable paper to financial advisers, strategic planners in investment firms and education professionals.
In this summary, you will learn
- Why people don’t invest in the stock market to the degree that theory suggests,
- How age and learning capacity influence investing behavior, and
- How risk perceptions affect equity investment.
About the Authors
Kartik Athreya is senior vice president and director of research at the Federal Reserve Bank of Richmond, where Urvi Neelakantan is an economist. Felicia F. Ionescu is a senior economist with the Board of Governors of the Federal Reserve System.
Comment on this summary
1 year agoInteresting summary. It would be beneficial to discuss alternatives to break that trend and increase the number of stock market investors.
Customers who read this summary also read
R. Jesse McWaters et al.
World Economic Forum, 2015
G. Andrew Karolyi
Oxford UP, 2015
Benjamin Graham and David Dodd
Gary Shub et al.
Boston Consulting Group, 2016