8:00 am ET
Feb 22, 2012


When Your DNA Dings Your ROI

    • That's a big assumption that the link is genetic. Just because twins take similar investment risks doesn't mean it has anything to do with their genes. They also had most likely had the same upbringing, schooling, and similar experiences in life.

    • Not only that but they may speak with each other more often and synchronize investing ideas.

    • Same idea applies to liberals. They have a defective gene that doesn't allow them to understand economics and finance.

    • Epigenetics studies how the environment, in this case financial experience, affects the expression of genes. It's been described as DNA being the book and epigenetic mechanisms read that book. There is an up and coming field called Behavioral epigenetics. Researchers collect data on individual behaviors and use molecular biology methods to look for gene expression patterns. Scientists are targeting learning, memory, addiction, etc. Data proving causation, not just correlation is tricky because you have to account for other significant experiences, and things like how much DNA sequence is shared, (hence the utility of the identical twins sample). I would like to read this publication to learn what logical process was used. Pretty neat research though! Biomedical researchers please check our scientific networking site at epiexperts.com.

    • Glad to know that genetics is proving that I am nor resonsible for anything I do. Can't help what I do or who I am. I was born this way. It will be good when "they" get all this under control and can start creating humans without genetic faults. Hitler would be prooud.

    • A major flaw is that the twins, while having similar habits, obtained those habits from the same parents. A control if possible would be if they were raised by different households (adopted) - but then your sample size would shrink dramatically.

      An interesting control, if possible, would be to compare the twins against the investing behavior of their parents. Because how the twins were raised would likely also influence their attitudes towards money and investing. Of course, parents share half the genetics of the kids, so that further complicates things...

    • As said in the post, the researchers also looked at non-twins and fraternal, which would seemingly address your concerns about being raised by the same parents. i.e. the identical twins exhibited similar behavior over and above non-twin or fraternal twin siblings.

    • Joe Light is correct. The study appears to have controlled carefully for these potential confounding effects.

      And, JD, no one is saying that all of your investing (or other) behavior is genetically predetermined or that this research means humans can't change their behavior. The study says that at least 54% of the variation in these investing behaviors is governed by factors other than genetics -- which means that environment and experience are more, not less, important than the DNA you were born with.

    • Fascinating Jason. I like the video too. For me, a good sign that I am doing the right thing is that it feels wrong and goes against my instincts. That's not to say I feel good when I actually do it but I've learned to at least partially control my urges in investing. Now if only I could do the same with food!

    • If the study were to be repeated in another country where the government collects statistics as zealously as Sweden does (possibly Finland since that country has a similar culture and was once ruled by Sweden), would it be possible for the researchers to control for another variable: investors who were adopted as children and investors born as identical twins who were then adopted by different families? Studies of identical twins often target people who were separated at birth. The sample size so obtained might be small but it might be worth a try.

    • Unless you show that twins who were raised separately also invest in a similar manner, then I'd put it down to the way they were brought up more than any genetically based predisposition.

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    Karen Damato
    Deputy Editor,
    Personal Finance


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