“Rookies to the stock market: A portrait of new shareholders”

• The average shareholder is aging and leaving the stock market.
• Nevertheless, the study shows that rookies enter the stock market.
• Most rookies chose one well-known firm as their first stock market investment.
• Study shows gender differences where female investors, despite smaller income hold larger stock portfolios.
• Individual investors in Sweden hold under-diversified stock portfolios, similar to their U.S. counterparts.

This study examines individuals entering the stock market, “rookies.” The study uses unique ownership data, containing investor holdings of all listed Swedish firms over the sample period from 2004 to 2010, to examine rookies’ stock portfolios. In addition, this study explores investor sophistication among rookies, based on individual characteristics and portfolio composition. Although the average shareholder is aging and leaving the stock market, this study shows there are signs of rejuvenation, with rookies entering the stock market. The results show that the majority of rookies hold under-diversified stock portfolios and choose one large firm as their first stock market investment. Rookie characteristics display gender differences, in which the average female rookie has lower income, is older, but holds a larger stock portfolio than her male counterpart.