When it comes to investing, conservatives may have a built-in advantage, according to a study by business scholars at Rice University, the University of North Carolina (UNC) at Chapel Hill, the University of Texas at San Antonio (UTSA), the University of Bath and Southern Methodist University (SMU).
A central tenet of long-term investing is to hold riskier investments such as stocks over holding cash or bonds, which are considered less risky. Through various studies that included more than 15,000 American adults, the researchers found that those who think like conservatives politically are more likely to invest like pros and choose options with higher risk and higher rewards, especially when they are confident and optimistic about their ability to invest.
The study, "Political Identity and Financial Risk Taking: Insights from Social Dominance Orientation," is published in the latest issue of the Journal of Marketing Research.
According to 2015 data from the Federal Reserve, 94.5% of U.S. households hold financial assets such as cash, certificates of deposit, bonds, stocks or mutual funds. In 2014, U.S. consumers invested more than $1.3 trillion in financial products.
The researchers found that self-confident conservatives invest in riskier options because they are more focused on the upside potential of their decision—achieving, increasing and maximizing potential gains.
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Study Says: Conservatives Are Better At Investing
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by Aaron Rocha
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When it comes to investing, conservatives may have a built-in advantage, according to a study by business scholars at Rice University, the University of North Carolina (UNC) at Chapel Hill, the University of Texas at San Antonio (UTSA), the University of Bath and Southern Methodist University (SMU).
A central tenet of long-term investing is to hold riskier investments such as stocks over holding cash or bonds, which are considered less risky. Through various studies that included more than 15,000 American adults, the researchers found that those who think like conservatives politically are more likely to invest like pros and choose options with higher risk and higher rewards, especially when they are confident and optimistic about their ability to invest.
The study, "Political Identity and Financial Risk Taking: Insights from Social Dominance Orientation," is published in the latest issue of the Journal of Marketing Research.
According to 2015 data from the Federal Reserve, 94.5% of U.S. households hold financial assets such as cash, certificates of deposit, bonds, stocks or mutual funds. In 2014, U.S. consumers invested more than $1.3 trillion in financial products.
The researchers found that self-confident conservatives invest in riskier options because they are more focused on the upside potential of their decision—achieving, increasing and maximizing potential gains.
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