Information acquisition and asset allocation with unknown income growth

We study the learning effects on consumption–portfolio rules with costly financial information acquisition and find that the agent’s acquiring information induces an additional demand for risky asset which is positively related to the degree of uncertainty about the income growth. •This paper studies the learning effects of acquiring costly information.•Information acquisition enhances the learning-induced certainty equivalent wealth.•The agent hedges against income growth uncertainty by varying the demand for risky asset.•This paper contributes to explaining the heterogeneity in household stock holding.