Men want money and women - and they always have
It is a well established evolutionary fact that men are generally keen to get their hands on both money and women. This relationship between greed and sex goes back thousands of years. Within this context, taking a certain amount of risk is a normal way to increase one’s level of success. However, it is intrinsic to the nature of risk that the results are sometimes disappointing or even disastrous.
Investigations show that the money-sex interplay affects investment behavior
Researchers have recently established that there is a connection in the brain between sexual stimulation and risk friendliness. A new investigation reveals that sexual stimulation tends to make men willing to take on greater financial risks. An experiment which entailed showing men erotic photographs and then placing them in a financial risk-taking situation, shows that being turned on (to some degree) makes men less conservative in their approach to investment.
Sex and money impact on the same part of the brain
Camelia Kuhnen of Northwestern University in Illinois explains that both money and women "stimulate the same region in the brain." Specifically, the nucleus accumbens plays a decisive role in how people experience pleasure.
Kuhnen's investigation, which she conducted together with the psychologist Brian Knutson of Stanford, has appeared in the journal "NeuroReport." They describe the experiment in which 15 young men were shown erotic photographs, after which they played a game of chance. The men who had recently been exposed to the sexually appealing material decided more frequently in favour of risk-friendly alternatives.
Research has also indicated that heterosexual men tend to worry less about their financial future when they have just been shown pictures of beautiful women. Additional research from Harvard has found a correlation between the level of testosterone and certain financial decisions.
The language of investment is also revealing
The sex-investment connection is also emphasised by some of the terminology used by traders. Phrases such as "massage the market" and "hardcore investments" lend some credibility to the above theories. It is also not uncommon to refer to appealing funds and investments as "very sexy."
And let's not forget that famous line from the Al Pacino film Scarface, "first you get the money, then you get the power, then you get the woman." Indeed, the world of literature, cinema and theatre are full of stories in which the linkages between money, power and sex are very explicit, to use an appropriate word.
How seriously can we take all this and how can it help us?
As is generally the case, the knowledge can be used and abused.
In terms of legitimate use, firstly, emotions should not be allowed to get in the way of prudent investment strategies. Sexual desire and its impact on rational thinking are certainly issues to consider. Anything that helps us understand the way we think and behave in should help us do better in the investment area.
And abuse...
On the other hand, it is extremely important know where to draw the line in terms of applying the above concepts and findings. It is not appropriate to make assumptions and referrals beyond a certain point, and in certain contexts. Specifically, sexuality should never be used deliberately to influence people to undertake investments to which they would not otherwise agree.
Secondly, in a dispute, nothing could be more unfair than to try and claim that somebody was risk friendly, because he had an eye for the ladies or had been known to watch the odd porn movie. If you think no one would do this, think again.
There was a notorious case in England recently in which an investment company tried to defend its risk-laden misselling on the basis that the man in question was a soldier and must therefore have been risk-friendly.
It is certainly possible that new insights and knowledge on the linkage between sex and Investment will not only be used productively, but abused by the wrong people in the wrong circumstances.
Money and Sex are Primal Drives
Money and sex are primal drives and learning more about them and their interaction with one another can facilitate better investment practices. It is all about understanding what makes us want to undertake certain investments and be willing to take the associated risk. Sexuality can clearly lead people to become more risk-friendly. It is important for investors not to be misled by such drives into imprudent investments. Likewise, it is unethical for sellers to take advantage of the potential to sell products for the wrong reasons.
Brian Bloch - Brian is based in Muenster, Germany and works as a managerial and financial journalist, as well as doing academic editing for non-native ...
