Tuesday, December 21, 2010

Investing with an Older Brain

As you get older, are your investments getting riskier? A new study from the National Institute on Aging suggests that elderly people may approach their decision-making with more risk than was previously thought. And it may not be a conscious decision - it might be hard-wired into our brains.

Researchers at Vanderbilt University asked participants of all ages to make investment-related decisions while their brains were being monitored. People who were over 65, the researchers found, made increasingly erratic decisions as the process went on, just when most people would have expected them to become more conservative.

The even stranger thing is, even though the researchers described themselves as "baffled" by the older people's investment decisions, they didn't turn out to be all that bad. In fact, the elderly subjects got returns just as strong as the younger people in the study. Maybe the supposedly erratic nature of older brains is simply a legitimate thought process that's beyond the understanding of science. For more information, click here.

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