Are More Intelligent People Making More Money In The Stock Market?

[james.hendrickson]

Found this study on Twitter. It's basically saying that having a higher IQ is associated with two things. First, increased stock market participation and second, higher stock market returns.

It's got some limitations. First it's only men, and second it's just the country of Finland. But, its still interesting.

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IQ and Stock Market Participation

Journal of Finance, May 2012 Volume 42Issue 2

Mark Grinblatt, Matti Keloharju, Juhani T. Linnainmaa

Abstract

Stock market participation is monotonically related to IQ, controlling for wealth, income, age, and other demographic and occupational information. The high correlation between IQ,
measured early in adult life, and participation, exists even among the affluent. Supplemental data from siblings, studied with an instrumental variables approach and regressions
that control for family effects, demonstrate that IQ’s influence on participation extends to females and does not arise from omitted familial and non-familial variables. High-IQ investors
are more likely to hold mutual funds and larger numbers of stocks, experience lower risk, and earn higher Sharpe ratios. We discuss implications for policy and finance research.

Full text here:

https://www.cfainstitute.org/en/research/cfa-digest/2012/05/iq-and-stock-market-participation-digest-summary

[bjl584]

More intelligent people are probably winning on all fronts, generally speaking.

[amanpreetsingh]

Other than intelligence, there are so many essential things that help people to make more money. To reap the harvest in the market, these are some fundamental approaches that people need to consider on a higher priority:


Age-old tested methods of investing in the stock market(It's only coming through extensive years of experience working in the stock market environment)

Approaching the surest way can always help people to succeed in the stock market.

Finally, the most important one -

You just have to know what's right for you, your personality, budget, time horizon and conviction level.