Behavioral Economist · Vanguard

Xiao Xu

I study how retail investors form beliefs and make decisions, and how AI is changing the financial advice they depend on.

My research uses large-scale survey and account data to study household financial decisions, bridging academic finance and industry practice. I hold a Ph.D. in Economics from Columbia University.

Retail investor behavior
AI & financial advice
Investor beliefs & expectations
Portfolio choice
Debt mistakes

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Published in Journal of Financial Economics · Annual Review of Financial Economics

Featured in The Wall Street Journal · NYT DealBook · Business Insider · CNBC · MarketWatch · InvestmentNews

Recognition Moskowitz Prize, honorable mention

New

New Vanguard Research · September 2026

The AI advice frontier: Use, trust, and the human edge

with Andy Reed, Nathan Young, Samantha Ostrom, Fiona Greig

A large-scale study of how retail investors actually use AI for financial guidance. Investors use AI to learn and explore, but they don't trust it much. Instead of replacing human advisors, AI makes investors value them more.

1 in 3: Vanguard investors have used AI for financial guidance
74%: of investors want human guidance in the next 2–3 years
37%: of AI users say AI has given them incorrect or misleading information; another 44% can't tell

Read the paper Coverage: Business Insider · InvestmentNews

Share of investors who have used AI for financial guidance

Source: Vanguard, The AI advice frontier (2026).

One in three ask bots,
few trust the answers they get;
humans matter more.

Academic Research

Peer-reviewed and working papers

Investor beliefs

Investor Beliefs and Expectation Formation

with Stefano Giglio, Matteo Maggiori, Joachim Rillo, Johannes Stroebel, Stephen Utkus

Annual Review of Financial Economics, forthcoming

Each mind holds its view,
past returns bend tomorrow;
trades follow, but slow.

Portfolio shares in ESG funds by expected excess return and motivation

Investor beliefsESG

Four Facts About ESG Beliefs and Investor Portfolios

with Stefano Giglio, Matteo Maggiori, Johannes Stroebel, Zhenhao Tan, Stephen Utkus

Journal of Financial Economics, 2025

Moskowitz Prize for Sustainable Finance Research, honorable mention

Coverage: The Wall Street Journal · Harvard Law School Forum

Green funds lag, most think;
still, conscience and climate fears
steer where dollars go.

Retail trading

Partisan Disagreement and Retail Trading During the COVID-19 Pandemic

Dissertation chapter, Columbia University

One virus, two tales;
red and blue read the same news
and trade far apart.

ExpectationsAsset pricing

The Reopening Effect of COVID-19 Vaccines on Corporate Earnings

with Harrison Hong, Jeffrey Kubik, Neng Wang, Jinqiang Yang

Coverage: NYT DealBook

Forecast lines whisper,
vaccine clocks hidden in curves,
earnings tell the time.

Industry & Policy Research

Vanguard research for investors, advisors, and policymakers

Bull-to-bear ratio among equity traders and VIX, 2022 to 2026: Vanguard investors bought the dip when fear spiked

Retail investor behaviorOngoing survey

Vanguard Investor Pulse

2022 – present · Latest: Discipline prevails during geopolitical shocks (May 2026)

Coverage: WSJ, CNBC, MarketWatch, InvestmentNews, U.S. News, and others

Headlines scream of war;
most investors hold steady,
the bold buy the dip.

Use cash for the expenses you expect in the next year: a today, someday, later framework

Household financeCash management

A Practical Guide to Managing Your Cash

with Paulo Costa, Stephen M. Weber, Emma Mullett

Summary: Beyond emergency funds: A smarter cash strategy (June 2026)

Not just for a storm,
cash covers the year ahead
so the rest can grow.

Figure from Private assets in defined contribution plans

RetirementPolicy

Private Assets in Defined Contribution Plans: Benefits, Risks, and Implications

with Fiona Greig, Roger Aliaga-Díaz, Ankul Daga, Kelly Hahn, Douglas Grim

Forty years pay off
with managers far above;
most stay only four.

Behavioral design

Principles for Behavioral Design: Nudging for Better Investment Outcomes

with Suzie Mulesky, Sachin Padmawar, Jacklyn Kalter, Jes Koepfler

Attend when it counts,
Commit to the path ahead,
Empathize, then nudge.

Figure from AI, demographics, and the U.S. economy

AIMacroeconomics

AI, Demographics, and the U.S. Economy: Quantifying the Coming Tug-of-War

with Joseph Davis, Kevin Khang, Lukas Brandl-Cheng, Andrew Clarke, Grant Feng, Andrew Patterson, Shaan Raithatha, Adam Schickling

AI pulls ahead,
aging workforce drags behind;
which force wins the rope?

Retail investor behavior

Buying Local: Local Bias in Individual Stock Portfolios

with Tom De Luca and James Rowley

Investors stay near,
home-ground stocks crowd their holdings,
funds spread risk wider.