DR. GEORGE M. KORNIOTIS
We examine the effects of learning by experience on portfolio decisions of U.S. investors. Our evidence suggests that knowledgeable investors benefit the most from learning. That is, as knowledgeable investors gain experience, they improve portfolio construction and performance. However, there might be limits to learning since investors are heavily influenced by prior choices made near the time when the investor starts trading (primacy effect) and in the most recent period (recency effect). Overall, our evidence suggests that investment knowledge can enhance learning, which may be impeded by the impact of prior choices
