Economics, Econometrics and Finance
8 years ago

Retail investors lose big on risky financial products, banks profit.

SSRN Electronic Journal
The Impact of Greed and Experience on Investors’ Returns and Banks’ Margins: Evidence from Short-Term Exchange-Traded Retail Products
Stefanie Baller, Oliver Entrop, Alexander Schober, Marco Wilkens

Paper Summary

The study looked at how individual investors perform when trading in certain financial products. They found that overall, investors didn't do well. The timing of their trades didn't make much of a difference, but the prices set by the companies issuing the products did. When investors took more risks, their performance got worse. This means that regular investors didn't make much money from these types of investments.

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