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Individual Investors and Portfolio Diversification in Late Victorian Britain: How Diversified Were Victorian Financial Portfolios?

Published online by Cambridge University Press:  29 June 2018

Dimitris P. Sotiropoulos  and
Janette Rutterford
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Abstract

This article investigates Victorian investor financial portfolio strategies in England and Wales during the second half of the nineteenth century. We find that investors held on average about half of their gross wealth in the form of four or five liquid financial securities, but were reluctant to adopt fully contemporary financial advice to invest equal amounts in securities or to spread risk across the globe. They generally held under-diversified portfolios and proximity to their investments may have been an alternative to diversification as a means of risk reduction, especially for the less wealthy.

Type
Research Article
Information
The Journal of Economic History , Volume 78 , Issue 2 , June 2018 , pp. 435 - 471
Copyright
Copyright © 2018 The Economic History Association 

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Footnotes

We would like to thank Ann Carlos and the two anonymous referees for their suggestions and critical comments on the first version of this article. The responsibility for any remaining errors or omissions is of course ours alone. This article draws upon research undertaken as part of a collaborative research project: “Women Investors in England and Wales, 1870–1930” funded by the U.K.’s Economic and Social Research Council (Award: Res-000-23-1435). We gratefully acknowledge the support of the collaborators on this project—David Green, Josephine Maltby, and Alastair Owens—as well as research assistants Stephen Ainscough, Carien van Mourik, and Claire Swan.

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