Do wealthy investors have an informational advantage? Evidence based on account classifications of individual investors

While trading is hazardous to most individual investors' wealth, some investors with well-functioning informational networks may be able to turn a profit. Indeed, data from the Chinese stock market show that wealthy investors with portfolio values above the 99.5th percentile (“super” investors) benefit from trading. Super investors who trade the most significantly outperform all other investors. Further investigation attributes at least part of their excess returns to informational advantages. These super investors profitably trade around companies' announcements of high stock dividends, particularly those registered in these super investors' localities, while the trades of other investors do not show such patterns.