Abstract:
It is demonstrated that showing value development paths has little influence on investment behaviour and investors’ beliefs relative to those who were not shown such a graphical representation. Yet, individuals who are presented with a chart will lower their estimation of the probability of loss. Altering the time-frame of the graph in which the development of a mutual fund is displayed does not influence investors’ risky asset allocation or perceived riskiness of the mutual fund. Furthermore, adding a savings account value development line to the graph in which the value development line of a mutual fund is displayed does not make a significant difference in the participants’ portfolio allocation
