Why kids are great investors
Are kids really more intuitive or are parents using them as proxy investors?
A new study reveals a surprising fact about children with brokerage accounts: they are extremely successful at picking stocks. The results are largely due to Mom and Dad, say academics Henk Berkman, Paul D. Koch and P. Joakim Westerholm in their upcoming Journal of Finance study. These kids’ parents tend to be wealthy, knowledgeable investors who want to share their best ideas with their offspring. But there’s a more sinister reason why these kids do so well: some parents have access to privileged information and use their kids’ accounts to “camouflage” insider trades. But be warned: now that the academics have spilled the beans, the regulators could come a-knocking.