Clients have various characteristics that influence their investment decisions. Many advisors understand that a significant part of the value of working with clients is helping them manage their mindset when it comes to investing. However, understanding investor psychology requires knowing what to measure. In the following text, we will examine several characteristics that can influence a client’s overall investor psychology, also known as behavioral risk tolerance. By measuring investor personality, advisors can identify which …
Article Title: Predicting Stock Market Performance: The Influence of Gender and Personality on Financial Decision Making Publication: Journal of Individual Differences (2021) Authors: Thomas Plieger, Thomas Grunhage, Eilish Duke, Martin Reuter Reviewer: Sean Bogart Examining Risk-Taking: Beyond Self-Report Studies A large amount of research assessing investor risk-taking has shown the presence of several factors that increase the likelihood of taking investment risks. Variables such as stress, particularly depression and negative affect, have been linked …
Last month a war (of sorts) was declared, pitting various risk tolerance companies against each other concerning their methodologies relating to portfolio risk assessment and analysis. The dispute appeared to be outside the realm of measuring a client’s appetite for risk. However, there is a very real and clear line of demarcation in the world of risk-tolerance assessment “advisortech” with respect to the method employed in assessing the investor’s so-called “risk tolerance,” particularly the …
In his “Intelligent Investor” column in the September 7, 2019 print edition of the Wall Street Journal, Jason Zweig wrote about an idea that we’ve thought about a good deal in the recent past: the fact that not all risk tolerance assessments are created equal. In the piece, Mr. Zweig—himself an accomplished and noted author regarding topics related to the intersection of money and our brains—takes specific aim at what some have referred to …
What does it take to be a great investor today? If you consider yourself the manager of your household’s finances, or if you’re a financial advisor that believes behavioral coaching and guidance can help clients be financially successful, then you will want to take a look at our latest white paper, Understanding Great Investors: The Competencies of Investing Success. The white paper, which shares the findings from one of our latest studies on investors in the …

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