toxic
11-13-2007, 09:25 AM
This article is about changes in the brain with age, as applied to investors.
Can it be applied to voters?
- Younger voters are more influenced by "terrorist" fears.
- Older voters may be willing to risk nuclear war to attack Iran.
- Older voters don't appear fear sending young people to war :)
- ???
http://finance.yahoo.com/focus-retirement/article/103862/Inside-the-Mind-of-the-Older-Investor?mod=retirement-post-spending
As pop culture portrays it, getting older means growing more conservative - in dress, politics and tolerance. ... the emerging science of neuroeconomics has shown that, contrary to what you might expect, changes in your brain make you better able to handle risk in old age than you were as a young adult. ...
Fear and loathing
Let's start with how the brain ages. As you get older, your hottest negative feelings begin to fade. The insula, a region of your brain that helps generate the sense of disgust, shrinks. Meanwhile, the amygdala, one of the centers for signaling fear and anger, also becomes less active. Those senses begin to fade like an old daguerreotype.
Researchers have displayed disturbing images, such as photos of rotting corpses, to people in their twenties and to retirees in their seventies and eighties; the brain waves in the older viewers were about a third less intense.
Similarly, brain scans show that people in their twenties get much more upset than older folks do when they expect to lose money. It turns out that investors in their sixties and beyond are considerably better at withstanding the mental stresses of a bear market than young investors are.
But there are downsides to the aging brain. As you grow older, your brain gets more impulsive; in some ways, becoming a senior citizen is like being a teenager again. As your fears abate, you're more easily swayed by appeals to positive emotions - which helps explain why get-rich-quick artists prey on the elderly.
New research by finance professor Alok Kumar shows that the average investor exhibits an "abrupt and significant drop in performance around the age of 70," probably because of fading memory and rising impulsiveness.
Economist David Laibson has shown that people over 65 are twice as likely as those in their late thirties to fall for a teaser rate on a credit card; the thrill of the low up-front rate blinds older borrowers to the burden of future high-cost debt.
Finally, people in their sixties and beyond tend to narrow their social circles, preferring to spend time with family and friends they already have. That can make it hard, once you're past a certain age, to get the financial advice you may need. ...
Can it be applied to voters?
- Younger voters are more influenced by "terrorist" fears.
- Older voters may be willing to risk nuclear war to attack Iran.
- Older voters don't appear fear sending young people to war :)
- ???
http://finance.yahoo.com/focus-retirement/article/103862/Inside-the-Mind-of-the-Older-Investor?mod=retirement-post-spending
As pop culture portrays it, getting older means growing more conservative - in dress, politics and tolerance. ... the emerging science of neuroeconomics has shown that, contrary to what you might expect, changes in your brain make you better able to handle risk in old age than you were as a young adult. ...
Fear and loathing
Let's start with how the brain ages. As you get older, your hottest negative feelings begin to fade. The insula, a region of your brain that helps generate the sense of disgust, shrinks. Meanwhile, the amygdala, one of the centers for signaling fear and anger, also becomes less active. Those senses begin to fade like an old daguerreotype.
Researchers have displayed disturbing images, such as photos of rotting corpses, to people in their twenties and to retirees in their seventies and eighties; the brain waves in the older viewers were about a third less intense.
Similarly, brain scans show that people in their twenties get much more upset than older folks do when they expect to lose money. It turns out that investors in their sixties and beyond are considerably better at withstanding the mental stresses of a bear market than young investors are.
But there are downsides to the aging brain. As you grow older, your brain gets more impulsive; in some ways, becoming a senior citizen is like being a teenager again. As your fears abate, you're more easily swayed by appeals to positive emotions - which helps explain why get-rich-quick artists prey on the elderly.
New research by finance professor Alok Kumar shows that the average investor exhibits an "abrupt and significant drop in performance around the age of 70," probably because of fading memory and rising impulsiveness.
Economist David Laibson has shown that people over 65 are twice as likely as those in their late thirties to fall for a teaser rate on a credit card; the thrill of the low up-front rate blinds older borrowers to the burden of future high-cost debt.
Finally, people in their sixties and beyond tend to narrow their social circles, preferring to spend time with family and friends they already have. That can make it hard, once you're past a certain age, to get the financial advice you may need. ...