Abstract
In this paper I investigate portfolio rebalancing and investment decisions of investors when their set of local companies changes: to do this I analyze the portfolios of individual investors who have changed their places of residence. My analysis indicates that the further investors move away from the closest establishment of a company that is held in their portfolio, the more of its shares they abnormally sell relative to those investors who do not 1110ve. Originally-held stocks which holdings have not been changed or have been reduced after the move are geographically more distant and provide lower abnormal returns to the investors at their new location than (i) stocks acquired after the 1110ve and (ii) originally-held stocks which holdings have been increased after the move. Confirming the results of other studies, I demonstrate that Swedish individual investors derive economically and statistically significant gains from investing locally. The results provide support for the idea that local bias of individual investors is a result of their having superior information about proximate investment opportunities.