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 April 16, 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 April 16, 2014).

Share This



More Science & Society News

Wednesday, April 16, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Are School Dress Codes Too Strict?

Are School Dress Codes Too Strict?

AP (Apr. 16, 2014) Pushing the limits on style and self-expression is a rite of passage for teens and even younger kids. How far should schools go with their dress codes? The courts have sided with schools in an era when school safety is paramount. (April 16) Video provided by AP
Powered by NewsLook.com
Could Even Casual Marijuana Use Alter Your Brain?

Could Even Casual Marijuana Use Alter Your Brain?

Newsy (Apr. 16, 2014) A new study conducted by researchers at Northwestern and Harvard suggests even casual marijuana use can alter your brain. Video provided by Newsy
Powered by NewsLook.com
NYPD Ends Muslim Surveillance Program

NYPD Ends Muslim Surveillance Program

AP (Apr. 15, 2014) The New York City Police Department has ended a program that once kept tabs on the city's muslim population. (April 15) Video provided by AP
Powered by NewsLook.com
In Washington, a Push to Sterilize Stray Cats

In Washington, a Push to Sterilize Stray Cats

AFP (Apr. 14, 2014) To curb the growing numbers of feral cats in the US capital, the Washington Humane Society is encouraging residents to set traps and bring the animals to a sterilization clinic, after which they are released.. Duration: 02:29 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:
from the past week

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