Retail Investor Trading Intentions: New Evidence from Australia*

Using a quarterly survey of 23,000 Australian retail equity investors, we study the relationship between beliefs about risk and returns and stock market intentions regarding holding, buying and selling. We provide evidence that investor intentions regarding buying or selling are primarily characterised by risk and return expectations, but sensitivity to their beliefs about risk and returns is greater for the intention to sell than to buy. In contrast, demographic factors such as gender, income and age play a key role in the decision to hold rather than trade. The results have significant ramifications for stock market participation and trading intensity in Australia.