Two Secrets of Successful Investors

A Finnish study (in Finland all males are tested for intelligence) suggests that high I.Q.'s may lead to better investing. Finns with high I.Q'.s were more diversified, more likely to invest in stocks. See What High I.Q. Investors Do Differently.

An earlier study from The Netherlands spotlights the social intelligence needed to find trustworthy investment advisers. Some investors are not merely scared of investing in stocks – they're afraid they'll wind up with an adviser who rips them off. "Knowing whom to trust, and relying on those who are trustworthy, is itself an aspect of intelligence. [The Netherlander economists] cited research that suggested that investment decisions relied significantly on a part of the brain called the Brodmann area 10. This region of the frontal cortex is believed to be associated with our ability to make inferences about others’ preferences and beliefs based on their actions."

The study found that those with a high level of trust were more likely to invest in stocks and more likely to have diversified their stockholdings.