Why Introverts Make Better Investors

Why Introverts Make Better Investors

Wallflowers may seem out of place in all the hullabaloo of the trading floor, but they could just have the advantage when it comes to making the best investments. According to research complied by Reuters, introverts take time to research and deliberate about their financial choices, while extroverts are more likely to dive into risky bets that don't pay off.

"Extroverts are often drawn to investing because of the thrill of it," Laurie Helgoe, a clinical psychologist and author of "Introvert Power," a book about the benefits of being an introvert, told Reuters.

Thrill-seeking may also be part of some people’s genetic code. When they take a gamble, extroverts can be driven by the rush of positive emotion provided by the neurotransmitter dopamine, while introverts might be more inclined to look for the stable sense of contentment provided by the neurotransmitter serotonin.

The most famous introvert investor? Warren Buffet, the über-successful billionaire business magnate.

Unfortunately, the qualities that make introverts intelligent investors can also work to their detriment. When introverts hesitate or spend too much time researching, they can let time-sensitive—and potentially lucrative—opportunities slip away. Their aversion to big risks also lessens the chances of an equally big payoff.

For instance, the Reuters article reports that introverts didn't take advantage of reduced stock prices at the end of the recession, according to Michael Pompian, a partner with Mercer Investment Consulting and co-author of a study in the Journal of Wealth Management on the relationship between investment decision-making and personality type.

Want to know your investment personality? You can take this test by the author of "Quiet: The Power of Introverts," Susan Cain. Knowing your tendencies may just help you strike it rich.

RELATED: Why a New Study Says Your Investing Strategy May Be All Wrong 


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