TY  - UNPD
A1  - Kim, Hugh H.
A1  - Maurer, Raimond
A1  - Mitchell, Olivia S.
T1  - Time is money: life cycle rational inertia and delegation of
investment management : [Version November 2013]
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2013,08
N2  - We investigate the theoretical impact of including two empirically-grounded insights in a dynamic life cycle portfolio choice model. The first is to recognize that, when managing their own financial wealth, investors incur opportunity costs in terms of current and future human capital accumulation, particularly if human capital is acquired via learning by doing. The second is that we incorporate age-varying efficiency patterns in financial decisionmaking. Both enhancements produce inactivity in portfolio adjustment patterns consistent with empirical evidence. We also analyze individuals’ optimal choice between self-managing their wealth versus delegating the task to a financial advisor. Delegation proves most valuable to the young and the old. Our calibrated model quantifies welfare gains from including investment time and money costs, as well as delegation, in a life cycle setting.
T3  - CFS working paper series - 2013, 08 
Y1  - 2013
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/32485
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-324854
IS  - Version November 2013
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -