\u201cWe find a significant portion, between 26 and 45 percent, of the variation across investors is due to genetic differences<\/strong>,\u201d says Siegel. \u201cOur evidence supports the view that investment biases reflect behaviors that were once shaped by evolutionary forces, but might no longer be optimal<\/strong>.\u201d<\/p>\n Siegel and his co-author analyzed data on fraternal and identical twins, and found that identical twins (those with the same genes) are more likely to exhibit the same investment biases than fraternal twins. Swedish financial institutions kept detailed information on citizens\u2019 investments in stocks, bonds and mutual funds for tax purposes for many years, and the records from 1999 to 2007 were used for this study on more than 30,000 twins.<\/p>\n In particular, the researchers studied the following biases:<\/p>\n 1. Under-diversification \u2013 the tendency not to spread risk broadly across investments; The study also looks at whether a person\u2019s experiences and environment affect genetic predisposition. One finding, for example, suggests that those with work experience in finance are less affected by genetic biases.<\/p>\n \u201cGenetic effects were more pronounced for direct stock holdings than for portfolios with both stocks and mutual funds,\u201d adds Siegel. \u201cAlso, the genetic effects were more noticeable for relatively larger investors.\u201d<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":" From the Arizona State University press release via Physorg: Whether you\u2019re a safe, conservative investor or a fast-trading stock-swapper, genes may actually play a role in some of your decisions…. Read more »<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[8],"tags":[127,28,234,91],"_links":{"self":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts\/1561"}],"collection":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/comments?post=1561"}],"version-history":[{"count":2,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts\/1561\/revisions"}],"predecessor-version":[{"id":1563,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts\/1561\/revisions\/1563"}],"wp:attachment":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/media?parent=1561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/categories?post=1561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/tags?post=1561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"http:\/\/therapytoronto.ca\/images\/blogpics\/Money.jpg\" "\\"money\\"")
Whether you\u2019re a safe, conservative investor or a fast-trading stock-swapper, genes may actually play a role in some of your decisions. <\/strong>Individuals frequently exhibit investment biases, such as not diversifying enough, being reluctant to sell stocks that have lost money or simply trading too much. Now, new research from Stephan Siegel, visiting professor at the W. P. Carey School of Business at Arizona State University, shows some investors may be born with those biases.<\/strong><\/p>\n
\n2. Home bias \u2013 the preference to invest in domestic, rather than foreign, securities;
\n3. Loss aversion \u2013 the reluctance to sell securities that have lost value;
\n4. Performance chasing \u2013 the tendency to buy securities that have performed well in the past with no guarantee of similar performance in the future;
\n5. Turnover \u2013 investors\u2019 trading intensity;
\n6. Skewness preference \u2013 investors\u2019 appetite for lottery-type securities.<\/p>\n