Openness endangers your wealth: Noise trading and the big five

We examine the cross-sectional determinants of individual trading activity based on given Big Five personality traits. Our unique data set is obtained by a self-reported questionnaire with 2147 individual investors. We find that Agreeableness, Extraversion and Openness are central in explaining cross-sectional differences in trading activity. Openness is found to be a main driver of excess trading. Overconfidence as predicted by low levels of Agreeableness relates to excessive trading, while high levels of Extraversion do not. Our performance prediction conditional on investor personality is that Agreeableness saves individual investors from losing money via trading, while Openness will endanger terminal wealth.