How much do investment mistakes respond to changes in how much is at stake? We answer this question by examining changes in individual investment behavior following inheritances arising from sudden parental deaths. We find that those who receive large inheritances exhibit fewer investment mistakes, but the sensitivity of mistakes to stakes is negligible in terms of economic magnitude, even after five years. For example, our evidence on the home bias in investments indicates that it would require a windfall inheritance of 87.6 million DKK (11.8 million euros) to eliminate such bias from the average individuals' portfolio. Tests using premature deaths of adult siblings before parental bereavement, which lead to exogenous differences in bequest sizes, confirm these findings. Mistakes do not appear to be sensitive to stakes in any meaningful way.

CFA Society Shanghai and HKUST Business School will jointly host the professional learning seminar on 27 June. We are fortunate to have Prof. Abhiroop Mukherjee, Associate Professor of Finance of HKUST Business School to give a speech on Stakes and Mistakes. We sincerely invite you to join this event.