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.