Dick spoke with Joe Mont and offered his thoughts on how “Daredevils Make Bad Investors, Great CEOs” for his August 11, 2011 article which appeared on The Street’s Retirement section.
The researchers admit that their particular study fails to fully factor in female behavior, in great part because of the lack of military data. They do, however, cite other studies finding that men are typically more prone to sensation seeking and a self-inflated sense of ego. When it comes to gambling, for instance, men often gravitate toward action-oriented games such as blackjack and craps, while women frequently enjoy more passive gaming with slot machines and keno (though there are, of course, many exceptions to such a broad brushstroke).
The findings jibe with what Dick Van Dyke, author, retirement educator and founder of Dick Van Dyke Financial in Springfield, Ill., has seen with clients over the years.
“We often get husbands and wives who are at odds and, more often than not, it is the wife who is taking the conservative posture and the husband that has taken risks throughout his life and has a tendency to want to still go for it,” he says. “That’s where they get into trouble with investing. They don’t see it as a well thought out methodology. They see it as more of a hunch or knee-jerk reaction. They fall into the trap of thinking that change means a solution and whenever something happens they are reactionary to it.”
Aggressive, “Type A” personalities are often looking for a big score, rather than time-tested strategies for the long haul, Van Dyke says.
“When it comes to investing and picking companies, they tend to do it more off of a gambling perspective more than a well thought out strategy,” he says.
Such an approach is very problematic the closer an investor gets to retirement, Van Dyke says.
“This is a time in their life when they need to be much more conservative,” he says. “We tend to work off what we refer to as a ‘gain and retain’ type strategy. When you get someone who is still in that Type A mode, they’re trying to make up for lost time. They will take on even more risk sometimes at that stage in life, because they feel that they have to accomplish something in a short period of time. Usually, it is disastrous.”
The full article can be found at The Street.com.
