Wednesday, September 11, 2013

Introverts Versus Extroverts in the Investment World

Which makes a better investor: an introvert or an extrovery?  Yahoo Finance reported an interesting article on this topic.  A clinical psychologist, Laurie Helodge, explained how extroverts are attracted to investing for the thrill they get from it. Thrill-loving can be an indicator of big risk taking.

Warren Buffet is a very good example of an introverted investor. He has taken risks but those risks were taken after much thought and research. An introvert will tend to gather more research before taking a risk. Introverts are reluctant to spontaneous decisions.

Investing behaviors can be tracked all the way back to our genes. Dopamine is what causes extroverts to get a high from investing by focusing on high achievements. Saratonin is what causes introverts to calm down. Both extroverts and introverts have their share of downsides. An extrovert might act too quickly, whereas an introvert might be overly cautious and miss a great opportunity in relying on more research.

This research is important because it reminds both introverts and extroverts to put themselves in an environment that they can perform at their best. For extroverts, an environment with lots of stimulation and background noise (even if it is just music). For introverts, a low-stimulated and quiet space. "Extroverts can learn when it is time to pull back and gather more information," advises Helgoe. "And introverts can learn when it is time to trust their analysis and push forward."

To read the full article, click here.

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