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01-11-2012, 11:14 PM
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If you’re of the opinion thatinvesting in the stock market takes a certain type of intelligence and knowledge,you’d be right. A new study by Mark Grinblatt(UCLA), Matti Keloharju (Aalto University) and Juhani T. Linnainmaa (University ofChicago) titled "IQ and Stock Market Participation (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1441512)" concluded that the smarter youare, the more likely you are to invest in stocksand be successful at it. Using a database of Finnishinvestors covering the 20-year period 1982-2001, the evidence was quite conclusive:The lower the IQ of the individual, the lower the participation, which was trueregardless of gender or wealth. That’s thecase because low-IQ investors tend to make more mistakes, which deters them fromparticipating further. Their tendencies see them fail to diversify their portfolio inplace of reaching for big-name stocks they’ve heard of.High-IQ investors were more successful because they minimized theirrisk with better diversity and had broader exposure to stocks and mutual funds. Theyalso do more research to find the lesser-known value stocks.The bottom line is the smarter you are, the more likely you are toinvest in the stock market and be good at it.More onAskMen:The 10Most Horrendous Things Girls Wear (http://www.askmen.com/fashion/galleries/women-s-fashion-trends-2012.html)The NewTablet Everyone's Talking About Continue Reading (http://www.askmen.com/money/investing_300/395_investors-and-intelligence.html)
http://www.askmen.com/money/investing_300/395_investors-and-intelligence.html ( More...
If you’re of the opinion thatinvesting in the stock market takes a certain type of intelligence and knowledge,you’d be right. A new study by Mark Grinblatt(UCLA), Matti Keloharju (Aalto University) and Juhani T. Linnainmaa (University ofChicago) titled "IQ and Stock Market Participation (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1441512)" concluded that the smarter youare, the more likely you are to invest in stocksand be successful at it. Using a database of Finnishinvestors covering the 20-year period 1982-2001, the evidence was quite conclusive:The lower the IQ of the individual, the lower the participation, which was trueregardless of gender or wealth. That’s thecase because low-IQ investors tend to make more mistakes, which deters them fromparticipating further. Their tendencies see them fail to diversify their portfolio inplace of reaching for big-name stocks they’ve heard of.High-IQ investors were more successful because they minimized theirrisk with better diversity and had broader exposure to stocks and mutual funds. Theyalso do more research to find the lesser-known value stocks.The bottom line is the smarter you are, the more likely you are toinvest in the stock market and be good at it.More onAskMen:The 10Most Horrendous Things Girls Wear (http://www.askmen.com/fashion/galleries/women-s-fashion-trends-2012.html)The NewTablet Everyone's Talking About Continue Reading (http://www.askmen.com/money/investing_300/395_investors-and-intelligence.html)
http://www.askmen.com/money/investing_300/395_investors-and-intelligence.html ( More...