New Research Shows You Don't Want the Person Managing Your Money to Be a Shark

A recent study found that psychopaths make poor hedge fund managers.
New Research Shows You Don't Want the Person Managing Your Money to Be a Shark
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If you think about the archetype of a money manager, someone cold, emotionless and driven probably springs to mind -- like Gordon Gekko in Wall Street. But new research has found that these traits not only make someone a pain to be around, but also don’t net successful investments.

"We should re-think our assumptions that might favor ruthlessness or callousness in an investment manager," said Leanne ten Brinke, a social psychologist at the University of Denver and lead author of the study. "Not only do these personality traits not improve performance, our data suggest that they many hinder it."

Related: 10 Things Mark Cuban Says to Do With Your Money

The researchers found that hedge fund managers who exhibit higher instances of psychopathy, narcissism and Machiavellianism -- three traits described quite evocatively as the “dark triad” -- actually perform worse than their professional peers who do not, especially over long periods of time.

The study looked at the personality traits of 101 hedge fund managers, then compared their investments and financial returns with their various personality types over the course of 10 years from 2005 to 2015.

Related: 20 Money Tips to Help You Save More

Money managers with psychopathic traits made less profitable investments than their peers, by under 1 percent per year. The researchers note that while the discrepancy might seem small annually, those mistakes can add up over time. Additionally, money managers that were more narcissistic took more risks to earn the same amount of money as those managers who were less narcissistic.

It goes to show that when you hire new team members, you would do well to keep an eye out for the candidates that exhibit empathy and care rather than callous single-mindedness. Your bottom line will thank you.

Related video: 7 Tips for Service-Based Business Owners to Crush it on Social Media

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