Finance Seminar Jonathan Reuter

The paper uses account-level data to analyze the behavior of approximately 600,000 retirement plan participants during the first quarter of 2020, when COVID-19 generated historic volatility, large negative returns, and significant unemployment.

The results show that Self-directed participants were significantly more likely than delegated participants to make a portfolio change during 2020Q1. Older participants and those with higher account balances had the largest reductions in equity exposure.

This finding, combined with infrequent reversals, suggest that many of the changes to asset allocation in 2020Q1 by retirement plan participants arose from shocks to investor attention rather than risk aversion.