Graduate School of Business


Doctor of Business Administration (DBA)


Yongli Luo


Overconfidence, financial literacy, investor behavior, investing


Business | Economics


This study examined the factors predicting overconfidence in U.S. investors and the relationship between overconfidence and seeking financial advice. This study adopted a quantitative research method using the 2018 NFCS Investor Survey data to explore the relationship between financial literacy and investor behavior in the U.S. stock market. Theories in financial literacy and overconfident behavior are combined to identify factors that predict overconfident behavior in U.S. investors. A logistic regression model was utilized to understand the relationship between financial literacy, demographics, and overconfident investor behavior. The results show a positive relationship between overconfident behavior and portfolio value, seeking financial advice, and conducting research activity. Results also showed that overconfidence is higher in male investors, younger investors, and investors with lower incomes. These findings are useful to individuals and corporations across several applications. Individuals can increase self-awareness regarding their own behaviors to identify certain biases, such as overconfidence, to help them avoid making large financial mistakes. Financial advisors can utilize these findings to become more aware of their clients that are likely to demonstrate overconfident behavior and help them mitigate these risks. Government entities can incorporate financial literacy programs that will establish baseline financial literacy competency in primary and secondary education programs.