The Precocious Tots of Finland

A University of Kansas professor and two co-authors, researching an upcoming issue of the Journal of Finance, found that children age 10 and younger substantially outperformed their parents in earnings from stock trading in the few days before and after rumors swirled on possible corporate mergers. A likely explanation, they said, is that parents or guardians were buying and selling for their children’s accounts using illegal insider information they were cautious about using in their own accounts, which would more easily arouse suspicion. While the parents’ accounts had nice returns, the kids’ accounts (including those held by the very recently born) were almost 50 percent more profitable. The study, reported by NPR in April, covered 15 years of trades in Finland, which was chosen because it collects age data the U.S. and other countries do not.