More Talk of the Twins and Investment Behavior

It's the research that keeps on breeding coveragehow genetics affect the way we invest our money. Henrik Cronqvist's study on investment behavior, with Arizona State University professor Stephan Siegel, continues to trigger national attention, most recently with a media "grand slam" in The Wall Street Journal, Bloomberg Businessweek, and The Economist. The three publications, within days of each other, are the latest to give Cronqvist's research national reach. It was only several months ago, in October, that TIME writer Dan Kadlec devoted a page to their research for the magazine's Moneyland section.
Cronqvist, the McMahon Family Associate Professor of Corporate Finance and George R. Roberts Fellow, says he's very pleased with the media coverage.
"It's great to see that media is picking up on this research, which, by the way," he says, "is already making its way into the classroom at CMC, through one of the courses I teach." He also says that "all of the continued media coverage has resulted in several e-mails from former students who have read the articles. And that's a fun way to stay connected."
The work is part of a large and ongoing research agenda by the scholars, revealing that people's investment biases are part of their DNA in essence, that we were born with them. "Genetic factors explain up to 50 percent of the variation in these biases across individuals," Cronqvist and Siegel conclude.
At the time of the release of a first study in 2009, Nature or Nurture: What Determines Investor Behavior? CMC previewed the findings online, and aired a more in-depth piece for CMC-IQ.
On Feb. 22, 2012, Wall Street Journal writer Jason Zweig wrote about the continuing research with his post, When Your DNA Dings Your ROI. His point-blank opening: "Why are some people more prone to stupid financial behavior than others? Several of the most common and costly mistakes that investors make appear to be encoded in our genes."
"This new research," Zweig notes, "hammers home how vital it is for us all to realize, in the immortal words of Benjamin Graham, that the investor's chief problem and even his worst enemy is likely to be himself.' "
In The Economist's March 10 piece examining Cronqvist and Siegel's research, the headline was more tongue-in-cheek: Natural Stock Selectiona new excuse for lousy investors. Recalling Cronqvist and Siegel's study of Swedish twins, the writer imparts their findings that "identical twins, who share all their genes, were more similar in their investing behaviour than fraternal twins, who share about half their genes."
"Bottom line," quipped Bloomberg Businessweek on Feb. 27, "if you bomb in the market, blame Grandpa."