Table 3. Portfolio inertia and stock trading behavior over the life cycle with no delegation option.

This table shows the proportion of investors by total wealth and age who exhibited inertia (i.e., no stock purchase), purchased additional stock, or sold stock. Panel A tabulates results from 2,000 independent simulation runs of base case model without a delegation option. The cut-off point for total wealth (see Eq. (8)) is based on the medium level of wealth for middle-aged investors. Panel B shows the corresponding results based on PSID data of waves 2001, 2003, 2005, and 2007. Numbers are weighted averages for each age group using the 2001 survey weights. The cut-off point for liquid wealth is based on the medium level of wealth for middle-aged investors in the model.

Panel A: Simulated data results
	Total wealth < $150,000			Total wealth ≥ $150,000
	Inertia	Active management		Inertia	Active management
Age	No trade	Bought	Sold	No trade	Bought	Sold
20–35	0.784	0.161	0.055	0.132	0.622	0.246
36–50	0.691	0.133	0.175	0.228	0.418	0.354
51–65	0.770	0.093	0.136	0.202	0.361	0.437
66–80	0.736	0.105	0.159	0.039	0.381	0.580
80+	0.838	0.069	0.093	0.079	0.348	0.573
Panel B: PSID data results
	Liquid wealth < $150,000			Liquid wealth ≥ $150,000
	Inertia	Active management		Inertia	Active management
Age	No trade	Bought	Sold	No trade	Bought	Sold
20–35	0.682	0.194	0.124	0.313	0.531	0.156
36–50	0.624	0.197	0.179	0.247	0.503	0.249
51–65	0.621	0.181	0.199	0.253	0.460	0.287
66–80	0.679	0.145	0.175	0.312	0.390	0.297
80+	0.731	0.150	0.119	0.316	0.336	0.349