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How Your Personality Affects Your Investment Choices
Published On: 05-Jul-2017

How Your Personality Affects Your Investment Choices

If you invest regularly you've probably made investment mistakes. Maybe you sold a winning stock too early or held on to a losing stock too long. Mistakes are common in investing and here at Morningstar we are constantly trying to help you avoid them. However, there are mistakes that seem to haunt all of us, the ones where you went against your adviser or followed your gut to no avail.Robert Durand, professor of finance at Curtin University in Australia, attributes these decisions to personality traits. Durand and two colleagues concluded in a Journal of Behavioral Finance article that personality traits are associated with a wide range of investment decisions and outcomes. The research for that article and Durand's ongoing research is based on the 5-factor model of personality traits (Big Five), which is the leading paradigm in personality research. It's an efficient model because it dismisses hundreds of personality traits in favour of the "Big Five".

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Extraversion Read More
Agreeableness Read More
Conscientiousness Read More
Neuroticism Read More
Openness to experience/intellect Read More