Personality

The Relation of Steroid Hormones and Personality Factors to Financial Performance and Risk-Taking Behavior

“…In particular, I show that energy depression (D5) is positively related to portfolio diversification and beta risk, which is consistent with Durand et al (2010) who show that negative emotions, which includes depression as one of its traits, is positively related to portfolio diversification and beta. I also find that traits not covered by the "Big Five" are related to measures of investment performance that are similar to those in Durand et al (2010), as well as vice-versa; such results show that that neither the personality inventory examined here or the Big Five used in Durand et al (2010) fully captures the link between investor personality and his/her financial performance.…”

“…The results shown in this section offer a different perspective than those by Durand et al (2010) Durand et al (2010). In particular, I show that energy depression (D5) is positively related to portfolio diversification and beta risk, which is consistent with Durand et al (2010) who show that negative emotions, which includes depression as one of its traits, is positively related to portfolio diversification and beta.…”

“…One explanation for their results is that personality factors help to shape financial preferences, and thereby influence the ensuing investment performance. In a related paper, Durand et al (2010) show that personality factors are related to two investment biases, namely the availability heuristic and the disposition effect. Consequently, these results suggest that investment biases are related to personality characteristics.…”

“…In this section I examine the overall relation between abnormal personality factor scores and investment performance measures in a fashion similar to Durand et al (2010). The analysis employs the entire range of factor scores (i.e., 1 to 10) in a linear regression model by using the backward elimination procedure for regression.…”

“…Similarly, the terms "abnormal personality" and "mental health" are commonly substituted for each other. Durand et al (2008) and Durand et al (2010) as foundations, in that they study the link between Norman's Big Five dimensions of personality (i.e., negative emotions, extroversion, openness to experience, agreeableness and conscientiousness) and investor financial choices and investment performance.…”