New Behavioral Finance Findings and Optimal Asset Allocation (AdvisorOne)

That investors will react more to financial market losses than gains is a well-known behavioral finance theory that's become increasingly important in this volatile economy. Enrico De Giorgi, professor in the School of Economics and Political Science at the University of St. Gallen in Switzerland and founding partner at Zurich-based firm Behavioural Finance Solutions, recently published a paper about it: "A Behavioral Explanation of the Asset Allocation Puzzle.”

His research has found that individual investors also have subjective mental markers that help them determine where their losses end and their gains begin. Financial advisors who can figure out their clients' individual markers will go a long way toward understanding loss aversion and coming up with the optimal asset allocation for an individual.

Read the whole story.

Related Life Products Resources

Powered by

  • Easily Earn $15k - 20k Per Month, PART TIME!

    Gain instant access to a complimentary prospecting package and learn how to start earning $15k - 20k per month.

  • GUL vs. IUL: Get the facts

    Join Charlie Gipple on March 25th at 2:00 EST as he walks you through the trade-offs of the premium cost, no-lapse guarantee and the potential for cash value growth between Guarantee Universal Life (GUL) and Index Universal Life (IUL) Insurance.


Advertisement. Closing in 15 seconds.