Emotional Intelligence and Investor Behavior

CFA Digest
August 2009 | Vol. 39 | No. 3 | 5 pages
Source: CFA Institute
John Ameriks Tanja Wranik Peter Salovey
Deborah Kidd, CFA (Reviewer)

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Summary

The authors study the relationship between investment decisions and the dimensions of emotional intelligence, personality, and impulsiveness. They find investors with high levels of emotional intelligence tend to exhibit investment behaviors that correlate with good investment performance. The authors conclude that no single personality trait dramatically affects returns but that traits can be used to predict investor behaviors that may influence investment outcomes. By integrating information about investor personality and emotional intelligence into the portfolio construction models used by investment advisers, they could generate portfolios that enhance investors’ likelihood of attaining their financial goals.

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