Traumatic Childhood Events Make Mutual Fund Managers More Risk Averse

Traumatic Childhood Events Make Mutual Fund Managers More Risk Averse Decades Later, Study Finds

Traumatic Childhood Events

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Traumatic childhood events can affect the investment decisions of mutual fund managers decades later, finds a study co-authored by Professor Raghavendra Rau at Cambridge Judge Business School.

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The study focuses on fund managers who experienced the death or divorce of a parent during their early years, concluding that such family disruption causes fund managers to be more risk averse and to invest less in “lottery-like” stocks.

These fund managers do not perform better or worse than peers who did not experience such childhood events, suggesting that affected fund managers tend to avoid both upside and downside risks.

The study is entitled “Till Death (or Divorce) Do us Part: Early-Life Family Disruption and Fund Manager Behavior”.

To see a summary of the study on the Cambridge Judge Business School website, including a link to the full study, please use this link: https://insight.jbs.cam.ac.uk/2019/ordeal-and-risk/

If you would like to contact Professor Raghavendra Rau, please email press-publicity@jbs.cam.ac.uk


Notes to Editors

About Cambridge Judge Business School

Cambridge Judge Business School leverages the power of academia for real-world impact to transform individuals, organisations and society.

Since 1990, Cambridge Judge has forged a reputation as a centre of rigorous thinking and high-impact transformative education, situated within one of the world's most prestigious research universities, and in the heart of the Cambridge Cluster, the most successful technology entrepreneurship cluster in Europe. The School works with every student and partner or client organisation at a deep level, identifying important problems and questions, challenging and coaching people to find answers, and creating new knowledge.

Cambridge Judge pursues innovation through inter-disciplinary insight, entrepreneurial spirit and collaboration. Cutting edge research is rooted in real-world challenges and students and clients are encouraged to ask excellent questions to create real-world change. Undergraduate, graduate and executive programmes attract innovators, creative thinkers, thoughtful and collaborative problem-solvers, and current and future leaders, drawn from a huge diversity of backgrounds and countries.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver