Weekend Reading for Financial Advisers: Prospect Theory, Pressure, and Premiums

Categories: Behavioral Finance, Private Wealth Management, Risk Management
Weekend Reading

This week’s selection of interesting reading (and viewing) from the past few weeks, presented in no particular order:

Behavioral Finance

Investing/Risk Management

Insurance/Elder Care


Leadership/Stress Management

  • Why do some people succeed under pressure while others fail? It is a question that has been tackled countless time in recent years, including a 2010 book aptly titled “Clutch: Why Some People Excel Under Pressure and Others Don’t.” More recently, however, the question was explored through the lens of children and exam stress: “Why Can Some Kids Handle Pressure While Others Fall Apart?” As I learned, we all carry the COMT gene, which “carries the assembly code for an enzyme that clears dopamine from the prefrontal cortex. That part of the brain is where we plan, make decisions, anticipate future consequences and resolve conflicts.” There are two versions of the gene: One builds enzymes that slowly remove dopamine while the other builds enzymes that rapidly clear dopamine. We all have one or the other, or a combination of the two, and this plays a big role in how we handle stress. The article is a great read and doesn’t just apply to children and parents — we can all learn more about why we respond to stress the way we do. (The New York Times Magazine)

And Now for Something Completely Different

  • Oliver Sacks, neurologist, writer, and amateur chemist (a.k.a. professor of neurology and psychiatry at Columbia University), published a fascinating essay on memory: “Speak, Memory.” Spend time with it, it’s worth it. (New York Review of Books)

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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