Featured Research

from universities, journals, and other organizations

Combat makes for gun-shy investors

Date:
April 9, 2012
Source:
Cornell University
Summary:
Combat veterans are more risk-averse investors than their counterparts who have never been in battle, according to a new study. As a result, combat veterans may struggle to build wealth through long-term investments.

Veterans who have faced combat are more risk-averse when it comes to investing than noncombatants, according to a new Cornell study. As a result, they may struggle to build wealth through long-term investments, the authors say.

Veterans with combat experience were 14 percent to 18 percent less likely than other veterans to invest in such risky assets as mutual funds and stocks, according to the research. There were no differences between the groups, however, in holding safe assets, such as Treasury bonds, certificates of deposit or checking accounts.

The work suggests that traumatic experiences unrelated to the financial sector affect one's investment behavior. Combat veterans appear to be overly cautious and all the worse for it financially, since portfolio choices of stock historically have been critical to economic advancement and building wealth.

"A person's investment decisions often are influenced by many factors that have nothing at all to do with income, wealth, education or the economy. We found that experiencing a trauma or psychological shock can affect your investment behavior -- even when the trauma is not finance or health related," said lead author Vicki L. Bogan, assistant professor of applied economics and management at Cornell's Dyson School of Applied Economics and Management. She added that the results suggest "that veterans' combat experiences are important to consider with regard to determining and managing veterans benefits."

The paper, co-authored with Dyson School colleagues David R. Just, associate professor, and Brian Wansink, professor, will appear in a forthcoming issue of Contemporary Economic Policy.

In comparing the investing habits of veterans who said they had faced combat experience with those of veterans who didn't, the researchers controlled for physical health issues and other individual characteristics that have previously been shown to influence investment behavior. The researchers used a 2000 University of Illinois survey that was conducted for a different purpose. Most of the veterans in the sample served in World War II or the Korean or Vietnam wars.

Once veterans come home, education becomes key, Just added. "With education, the effects of trauma go away -- they will put their money in reasonable risks and obtain normal returns. Without that education they will be at a financial disadvantage the rest of their lives. Strong educational support is one key to recovering from combat."


Story Source:

The above story is based on materials provided by Cornell University. The original article was written by Susan Kelley. Note: Materials may be edited for content and length.


Cite This Page:

Cornell University. "Combat makes for gun-shy investors." ScienceDaily. ScienceDaily, 9 April 2012. <www.sciencedaily.com/releases/2012/04/120409133633.htm>.
Cornell University. (2012, April 9). Combat makes for gun-shy investors. ScienceDaily. Retrieved October 20, 2014 from www.sciencedaily.com/releases/2012/04/120409133633.htm
Cornell University. "Combat makes for gun-shy investors." ScienceDaily. www.sciencedaily.com/releases/2012/04/120409133633.htm (accessed October 20, 2014).

Share This



More Science & Society News

Monday, October 20, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Facebook Says The DEA's Fake Accounts Go Too Far

Facebook Says The DEA's Fake Accounts Go Too Far

Newsy (Oct. 19, 2014) Facebook says the DEA violated its Terms of Service and that such impersonations damage the integrity of the site. Video provided by Newsy
Powered by NewsLook.com
Court Ruling Means Kids' Online Activity Could Be On Parents

Court Ruling Means Kids' Online Activity Could Be On Parents

Newsy (Oct. 17, 2014) In a ruling attorneys for both sides agreed was a first of its kind, a Georgia appeals court said parents can be held liable for what kids put online. Video provided by Newsy
Powered by NewsLook.com
Raw: Cruise Ship Returns to US Over Ebola Fears

Raw: Cruise Ship Returns to US Over Ebola Fears

AP (Oct. 17, 2014) A Caribbean cruise ship carrying a Dallas health care worker who is being monitored for signs of the Ebola virus is heading back to Texas, US, after being refused permission to dock in Cozumel, Mexico. (Oct. 17) Video provided by AP
Powered by NewsLook.com
Spanish Govt: Four Suspected Ebola Cases in Spain Test Negative

Spanish Govt: Four Suspected Ebola Cases in Spain Test Negative

AFP (Oct. 17, 2014) All four suspected Ebola cases admitted to hospitals in Spain on Thursday have tested negative for the deadly virus in a first round of tests, the government said Friday. Duration: 00:55 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins