Institutional investors' loss aversion impacts career success and performance.
The article "Loss-Averse Preferences, Performance, and Career Success of Institutional Investors" explores how the fear of losing money affects the investment decisions and success of professional investors. The researchers found that investors who are more afraid of losses tend to make safer investment choices, which can lead to lower overall performance. However, these cautious investors are also more likely to have longer and more successful careers in the investment industry. This suggests that being risk-averse can have both positive and negative impacts on an investor's career trajectory.