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Narcissism and stock market investing: Correlates and consequences
of cocksure investing
Joshua D. Foster a,⇑ , Dennis E. Reidy b , Tiffany A. Misra a , Joshua S. Goff a
a Psychology Department, University of South Alabama, Mobile, AL 36688, United States
b Psychology Department, University of Georgia, Athens, GA, United States
article info
Article history:
Received 5 November 2010
Received in revised form 20 December 2010
Accepted 8 January 2011
Available online 2 February 2011
Keywords:
Narcissism
Motivation
Risk-taking
Decision-making
Approach motivation
Avoidance motivation
Economics
1. Introduction
abstract
The global economy is in the midst of its worst decline since the
Great Depression. The causes of this financial calamity are varied
and complex, although many commentators speculate that cocksure
investors and corporate leaders played a significant role by
making risky and often foolhardy financial decisions (e.g., Cohan,
2009; Gladwell, 2009). What fueled this cocksureness? During
the 1990s and early 2000s, the economy experienced one of the
most prominent bull markets in history. Investors were positive
about the future and confident that their investments would pay
off. For instance, when surveyed in October 2007, more than
three-quarters of individual and institutional investors predicted
that the US stock market would rise during the next year (Shiller,
2000, 2009). These investors were clearly overconfident because
the stock market ultimately plunged by nearly 40%.
Economic climate played an important role in investor exuberance
and overconfidence. However, the level of risk that investors
bore is probably not fully explained by situational factors alone.
Consider that during even the historic bull markets of the 1990s
and early 2000s, most investors did not utilize risky financial
instruments, such as derivatives. Most families purchased homes
within their means. Most corporations’ investments were not
⇑ Corresponding author. Address: Department of Psychology, University of South
Alabama, Mobile, AL 36688, United States. Tel.: +1 251 460 6548.
E-mail address: foster@usouthal.edu (J.D. Foster).
0191-8869/$ - see front matter Ó 2011 Elsevier Ltd. All rights reserved.
doi:10.1016/j.paid.2011.01.002
Personality and Individual Differences 50 (2011) 816–821
Contents lists available at ScienceDirect
Personality and Individual Differences
journal homepage: www.elsevier.com/locate/paid
Two studies tested whether narcissists are prone to making risky stock market investments. In Study 1,
narcissistic participants reported being more inclined to invest in stocks that exhibited high volatility
(i.e., large price fluctuations). In study 2, participants created hypothetical investment portfolios using
a selection of real stocks whose values were tracked for a five-week period. Narcissists selected more
highly volatile stocks for their portfolios and this tendency was explained by narcissists’ heightened
approach motivation. Narcissists also lost significantly more money during the tracking period—the stock
market as a whole declined by approximately 30% during the tracking period—and this was fully
explained by the heightened volatility of their investments. Cumulatively, these results suggest that narcissistic
personality is linked to risky stock market investing, which is especially maladaptive during periods
of economic decline.
Ó 2011 Elsevier Ltd. All rights reserved.
leveraged to the point that even a small fraction of losses would
be ruinous. The economic situation was not so powerful that
everyone simply got swept up by a tsunami of financial risk-taking.
Flagrant financial risk-taking was prevalent during this time period,
but it was limited to a proportion of investors. The purpose
of the present research was to examine one characteristic, narcissistic
personality, that we think might distinguish these risky
investors from the general investor population.
Narcissism is particularly relevant to the current economic crisis.
Narcissists 1 are more likely than others to rise to leadership
positions (Brunell et al., 2008). Thus, the financial decisions that narcissists
make affect greater numbers of individuals (e.g., employees,
investors, tax-payers). Although we cannot say for certain how many
corporate leadership positions were/are occupied by narcissists,
anecdotal evidence suggests that narcissists are overrepresented in
this population. To the extent that corporate leaders of the recent
past were more narcissistic than the general population, and if narcissism
is indeed linked to financial risk-taking, then narcissism
might have played a role in the economic meltdown.
1 We use the term ‘‘narcissist’’ as a matter of convenience to refer to individuals
who score above the mean on measures of narcissistic personality. In actuality, most
narcissism measures, such as the Narcissistic Personality Inventory (NPI), do not
capture a specific group of ‘‘narcissists’’ (Foster & Campbell, 2007). Furthermore, the
NPI—the measure used in the present studies—is not a measure of clinical narcissism
and thus ‘‘narcissists’’ in this context should not be confused with individuals with
Narcissistic Personality Disorder.

Why would narcissists be expected to make risky financial decisions?
Financial decisions are often preceded by an assessment of
risk (i.e., potential financial losses) and reward (i.e., potential financial
gains). Individuals who are more strongly motivated by reward
(i.e., highly approach motivated) than punishment (i.e., weakly
avoidance motivated) tend to make riskier financial decisions
(e.g., Hamilton & Biehal, 2005; Zhou, Pham, Mick, Iacobucci, & Huber,
2004). Recent research suggests that narcissism is characterized
by strong approach motivation and weak avoidance
motivation (Foster, Misra, & Reidy, 2010; Foster, Shenesey, & Goff,
2010; Foster & Trimm, 2008). That is, narcissists are more strongly
motivated by reward acquisition than punishment avoidance.
Thus, narcissists should be expected to make riskier financial decisions.
Evidence supporting this hypothesis comes from studies
showing that narcissists engage more frequently in risky financial
activities, such as gambling (Lakey, Rose, Campbell, & Goodie,
2008). More directly, Foster, Misra et al. (2010) showed that narcissists
are more likely to endorse financial investment strategies that
couple high risk with high reward potential (e.g., investing in
stocks rather than bonds).
The purpose of the present study was to test whether narcissism
predicts financial risk-taking within the specific context of stock
market investing. We hypothesized that narcissism would predict
a tendency to invest in riskier stocks, with ‘‘risky’’ being defined in
terms of a stock’s volatility. Stock volatility—i.e., how much a stock’s
value (i.e., price per share) fluctuates relative to other stocks—is a
useful metric of stock riskiness for a couple of reasons. Practically
speaking, there exist well-established measures of stock volatility.
One of these measures is the economic indicator b (used in Study
2), which indicates how much a single stock’s value fluctuates relative
to a market indicator, such as the S&P 500 or FTSE. In terms of
validity, highly volatile stocks are indeed risky investments. Put
simply, highly volatile stocks are riskier than average stocks because
their price valleys are deeper. However, they are also more potentially
rewarding because their price peaks are higher.
Because narcissists are more strongly motivated by reward than
punishment, they should make investment decisions that maximize
reward potential even at the cost of heightened risk exposure.
In other words, highly volatile stocks should be particularly attractive
to narcissists. If our hypothesis is correct, then narcissism
should be an adaptive personality trait during economic bull markets
and a maladaptive trait during economic bear markets. This is
because volatility correlates positively with price during bull markets
(i.e., when most stocks’ values are rising) and negatively with
price during bear markets (i.e., when most stocks’ values are falling).
Therefore, investing in more volatile stocks will generally result
in greater profits during bull markets and greater losses during
bear markets.
In this article, we present findings from two studies that test the
link between narcissism and risky stock market investing. In Study
1, participants were asked to select which stock they would rather
invest money into from amongst four hypothetical stocks depicted
by plots showing varying degrees of volatility. In Study 2, participants
created hypothetical investment portfolios using actual
stocks and performance indicators, including b. In both studies,
narcissistic participants were expected to be attracted to highly
volatile stocks. Specifically, narcissistic participants were expected
to select stocks depicted in plots showing high volatility (Study 1)
and create investment portfolios more heavily populated with
highly volatile stocks (Study 2). Finally, the investment portfolios
created in Study 2 were tracked for five weeks to determine
whether narcissism predicts investment performance. By chance,
the US stock market experienced a historic collapse during this
tracking period, which allowed us to examine how investments
by narcissists perform during strong economic declines (i.e., a bear
market).
J.D. Foster et al. / Personality and Individual Differences 50 (2011) 816–821 817
2. Study 1
In this study, we conducted an initial test of the link between
narcissism and risky stock market investing. We hypothesized that
narcissists would be prone to making hypothetical investments
into stocks that displayed higher levels of volatility (i.e., stocks
with more severe price fluctuations).
2.1. Method
2.1.1. Participants and procedure
A sample of 237 University of South Alabama undergraduates
(M age = 20.93; 56% female) completed measures of narcissism
and stock volatility preference.
2.1.1.1. Narcissism. Narcissism was measured with the 40-item
Narcissistic Personality Inventory (NPI; Raskin & Terry, 1988). NPI
scores for the present sample ranged from one to 39 (M = 17.74,
SD = 7.54, a = .87) with higher scores indicating higher levels of
narcissistic personality.
2.1.1.2. Stock volatility preference. Participants were presented with
four hypothetical stocks that differed in terms of volatility and
asked to select the one that they would most want to invest their
money. Volatility was depicted graphically as the amount each
stock’s price fluctuated during the previous 1000 stock market
closings (see Appendix A for actual plots used in study). To create
these plots, times series data for 1000 time points were simulated
such that the value for each successive time point differed from
that of the previous time point by a random integer between 3
and +3. Time point #1 was designated as the present time and
was set at 100 (i.e., the price of the stock at the most recent close
of the stock market was set at $100). Therefore the price for time
point #2 could range from 97 to 103, the price for time point #3
could range from 94 to 106 (the actual price depended, of course,
on what the price for time point #2 was), and so forth all of the
way to time point #1000. These prices were then plotted with
the Y-axis designated as the stock’s closing price and the X-axis
designated as time. Time points were reversed before plotting so
that time point #1 appeared at the far right end of the X-axis. This
ensured that the most recent closing price of the stock was fixed at
$100. This simulation was repeated until a plot with adequate visual
appeal (e.g., appeared to show relatively consistent price fluctuations
across the time series) emerged. We term this plot and
data set the standard time series.
Next, to create the four plots used in the study, a plot representing
very low volatility was created by multiplying by 0.5 the range
with which the prices for each time point in the standard time series
were allowed to differ (i.e., the range was changed from ±3 to
±1.5). In other words, we created a new time series plot that displayed
one-half the daily fluctuation displayed in the standard
time series plot. To create the second, third, and fourth plots, we
used multipliers of 2.0, 3.5, and 5.0, respectively. In sum, we created
four time series plots that displayed between one-half and
five times the volatility displayed in the standard time series plot.
For quantitative purposes, we use the numbers 1–4 to represent
these plots with higher numbers representing plots reflecting higher
volatility. Participants were asked to select from amongst these
four plots (M = 2.39, SD = .99).
3. Results and discussion
As hypothesized, narcissism positively predicted the selection
of stocks represented by plots depicting greater price volatility,
r = .13, p < .05, R 2 = .02. Put differently, participants who selected

818 J.D. Foster et al. / Personality and Individual Differences 50 (2011) 816–821
the two lower volatility stocks (n = 137) reported an average NPI
score of 16.91 (SD = 7.38), whereas participants who selected the
two higher volatility stocks (n = 100) reported an average NPI score
of 18.89 (SD = 7.65), d = .26. In short, this represents a relatively
small, but statistically significant effect suggesting that narcissists
are prone to making investments in riskier (i.e., more volatile)
stocks.
Gender was also analyzed as a potential confounding and moderating
variable in this study and in Study 2. Although men scored
higher in narcissism and made somewhat riskier investment selections
than did women, controlling for gender or including it as a
moderating variable did not significantly change any of the results
reported in this paper. In short, narcissism’s link to risky investing
was not contingent upon gender. Gender is therefore not discussed
further.
4. Study 2
The next study sought to more conclusively test the link between
narcissism and risky stock market investing by having a
sample of college undergraduates create hypothetical investment
portfolios (i.e., collection of investments) using real stocks, the values
of which were tracked for an approximate five-week period.
Serendipitously, the tracking period of this study overlapped the
historic collapse of the US stock market that occurred during September
and October, 2008. We were thus able to observe how narcissists’
investments perform during a strong economic downturn
and test whether narcissism is financially maladaptive during bear
market conditions. Additionally, we included a measure of approach-avoidance
motivation in this study to examine whether
narcissists’ investing tendencies are explained by their strong approach
motivation and/or weak avoidance motivation.
4.1. Method
4.1.1. Participants
Seventy-one University of South Alabama undergraduates (M
age = 21.20, 58% women) participated in this study in exchange
for credit toward their research participation requirement. Due to
the complexity of the study (e.g., participants were taught about
economic concepts, such as b) individuals who reported little or
no familiarity with the stock market and/or a prior diagnosis of a
learning disability were excluded from the study.
4.1.2. Materials and procedure
Participants completed individual difference measures of narcissistic
personality and approach-avoidance motivation as part
of a subject pool registration session conducted at the beginning
of the semester. Narcissism was again measured with the 40-item
NPI (Raskin & Terry, 1988). NPI scores for the present sample ranged
from six to 37 (M = 18.07, SD = 7.09, a = .85). Approach-avoidance
motivation was measured with the 35-item Sensitivity to
Reward and Punishment Scale (O’Connor, Colder, & Hawk, 2004;
Torrubia, Avila, Molto, & Caseras, 2001). Approach motivation
(i.e., sensitivity to reward) scores ranged from one to 17
(M = 8.39, SD = 3.63, a = .76) and avoidance motivation (i.e., sensitivity
to punishment) scores also ranged from one to 17
(M = 8.15, SD = 4.54, a = .83) with higher scores indicating higher
levels of approach and avoidance motivation, respectively.
Upon arrival to the study, participants were informed that they
would be creating stock market investment portfolios based on actual
stock market data and that their portfolios would be tracked
for approximately five weeks. They were further informed that
participants whose portfolios were most profitable at the end of
the tracking period would receive cash prizes ranging from $100
for first place to $20 for fifth place. Multiple prizes were awarded
to discourage participants from employing extremely risky (‘‘Hail
Mary’’) investment strategies in an attempt to claim a single grand
prize. This appeared to work because participants’ investments
ended up on average being only moderately risky.
Before creating portfolios, participants listened to an approximately
30-min long didactic about several fundamental concepts
of the stock market (e.g., what a share of stock is). Most importantly,
participants learned about the economic indicator b, which
measures a stock’s volatility. b is the unstandardized regression
coefficient that results from regressing a broad indicator of market
performance (e.g., S&P 500, FTSE) onto the performance of a single
stock over a given length of time. For example, a stock with b = 2.0
correlates positively with the performance of the stock market, but
tends to fluctuate in price at about twice the rate of the market. A
stock with b = 0.5 is about half as volatile as the market. In short,
stocks with high b tend to experience more pronounced price fluctuations
resulting in enhanced risk exposure and reward potential
(to make this point salient, we generally referred to b using the
acronym RR, which stood for Risk/Reward). Whether investors
actually profit or lose money is often best predicted by the performance
of the market. When the market rises, stocks with high b
tend to experience extreme profits; when the market falls, high b
stocks tend to suffer extreme losses (this assumes that b is positive,
which is true for the vast majority of stocks).
Following this presentation, participants were given a list containing
the 30 companies that collectively made up the Dow Jones
Industrial Average (e.g., Walmart, Microsoft). 2 Listed beside each
company was its b (b values were multiplied by 100 to make them
whole numbers), current price-per-share, and 52-week high and
low prices. All values were taken from the close of the New York
Stock Exchange (NYSE) the day before the study began (September
2, 2008) and all participants were run within three weeks of this
date. The dates that participants participated in the study were
uncorrelated with their stock selections or any other variables reported
in this study.
Participants were next given an imaginary sum of $10,000 with
which to invest into one or more of the 30 stocks. Participants were
permitted to assign their investments to any single company or
combination of companies they desired. The only requirements
were that (i) they had to invest all $10,000 and (ii) they had to limit
their investments to the 30 listed companies.
4.1.2.1. Portfolio volatility. We computed how volatile participants’
portfolios were by averaging the b values for the 10 investments
that made up their portfolios. Portfolio volatilities ranged from
58.10 to 168.80 (M = 111.60, SD = 25.33). Higher scores reflected
higher portfolio volatility.
4.1.2.2. Portfolio value. At the end of the tracking period (i.e., the
close of the NYSE on October 10, 2008), portfolios values were assessed
(all portfolios began the study with a $10,000 value). The
Dow Jones Industrial Average lost approximately 27% of its value
during the tracking period. Not surprisingly, all participants’ portfolios
also lost value (M portfolio value = $6605, SD = $932,
range = $3909–$8130); the average portfolio lost 34% of its initial
$10,000 value.
5. Results and discussion
As hypothesized, narcissism predicted the creation of more volatile
stock portfolios, r = .36, p < .01. Also consistent with prior research
(Foster & Trimm, 2008), narcissism predicted high approach
2 One of the companies, AIG, has since been removed from the Dow-30.

motivation, r = .49, p < .001, and low avoidance motivation,
r = .38, p < .01. Furthermore, approach motivation predicted more
volatile portfolios, r = .34, p < .01, and avoidance motivation predicted
less volatile portfolios, r = .26, p < .05. To summarize, narcissists
and individuals high in approach motivation selected
riskier stocks for their portfolios; individuals high in avoidance
motivation selected safer stocks for their portfolios.
We next tested whether approach-avoidance motivation mediated
the link between narcissism and portfolio volatility using the
steps outlined by Baron and Kenny (1986). When portfolio volatility
was regressed onto narcissism, approach motivation, and avoidance
motivation simultaneously, the direct association between narcissism
and portfolio volatility fell to non-significant, b = .16, p = .25.
Likewise, the link between avoidance motivation and portfolio volatility
also fell to non-significant, b = .19, p = .12. In contrast, the
link between approach motivation and portfolio volatility remained
statistically significant, b = .26, p < .05. This indicates that the narcissism-portfolio
volatility link was mediated primarily by approach
motivation. Preacher and Hayes’ (2004) bootstrapping procedure
confirmed that the indirect effect of narcissism on portfolio volatility
carried through approach motivation was significant; that is, the
95% confidence intervals of the indirect effect did not cross zero, 95%
CI = .08 and 1.10, whereas the indirect effect carried through avoidance
motivation was non-significant, 95% CI = .07 and .81. Narcissists’
risky stock selections in this study were best explained by their
heightened level of approach motivation.
We also tested whether the stocks that narcissists picked for
their portfolios performed better or worse than average during
the tracking period. Not surprisingly, highly volatile portfolios lost
significantly more money than did less volatile portfolios, r = .84,
p < .001. Likewise, narcissism, which was positively correlated with
portfolio volatility, also predicted greater losses, r = .26, p < .05. In
short, narcissists, who created more volatile stock portfolios, lost
significantly more money than did their less narcissistic
counterparts.
Next, we tested whether the link between narcissism and poor
portfolio performance was explained by portfolio volatility. Consistent
with mediation (Baron & Kenny, 1986), when we controlled for
portfolio volatility, the association between narcissism and portfolio
performance fell to non-significant, b = .06, p = .43, whereas the
association between portfolio volatility and portfolio performance
remained strong, b = .86, p < .001. Confirming the significance of
the mediation, 95% confidence intervals representing the indirect
effect of narcissism on portfolio performance carried through portfolio
volatility did not cross zero, 95% CI = 65.19 and 16.85.
Finally, to put all of these results together, we constructed a
structural equation model that reflected our theoretical contention
that the poor performance of narcissists in this study was caused
by the fact that they made risky (i.e., highly volatile) investments,
which was ultimately caused by their strong approach orientations.
This model is shown in Fig. 1. We created latent variables
for narcissism, approach motivation, and portfolio volatility by
splitting the measures into two or three parcels that contained
the summed scores for a selection of items. Specifically, we created
narcissism
J.D. Foster et al. / Personality and Individual Differences 50 (2011) 816–821 819
three parcels for narcissism by summing NPI items 1, 4, 7, 10...
into parcel 1, items 2, 5, 8, 11... into parcel 2, and items 3, 6, 9,
12... into parcel 3. We created two parcels for approach motivation
that contained either odd or even numbered items of the Sensitivity
to Reward Scale. We created two parcels for portfolio
volatility that contained either odd or even numbered b values (recall
that participants made 10 separate investments, so each parcel
contained five bs). Of course, we could not create a latent variable
for portfolio performance since it was simply a dollar amount, so it
was modeled as a manifest variable.
We tested our hypothesized model using Amos Ò v6.0 SEM software
and found that it fit the data nearly perfectly (v 2 [18 df]=
15.53, p = .63; CFI = 1.00, GFI = .95, SRMR = .06, RMSEA = .00). We
also tested alternative models that contained either (i) a direct
path from narcissism to portfolio volatility, (ii) a direct path from
narcissism to portfolio performance, or (iii) a direct path from approach
motivation to portfolio performance. None of these alternative
models significantly improved model fit relative to our
hypothesized model (Dv 2 [1 df] values were .64, 3.12, and 3.53,
respectively; ps were .42, .08, and .06, respectively). In sum, our
hypothesized model fit the data exceptionally well and as well as
any of the less parsimonious alternative models tested. We believe
that our hypothesized model best reflects reality in terms of how
narcissism operates within the context of stock market investing.
6. General discussion
nar1 nar2 nar3 app1 app2 beta1 beta2
.74 .76 .91 .80 .72 .72 .86
The results of these studies suggest that narcissists are prone to
investing in risky stocks. This tendency appears to stem primarily
from narcissists’ hypersensitivity to reward (i.e., high approach
motivation). Researchers have suggested that the motivational disposition
of narcissists (i.e., high approach/low avoidance motivation)
is likely to be adaptive in some circumstances and
maladaptive in others (e.g., Foster & Trimm, 2008). Investing in
highly volatile stocks exposes investors to greater potential gains
and losses depending upon market conditions (e.g., whether the
market is in ascent or decline). Accordingly, narcissistic personality
should be financially disadvantageous during periods of economic
decline. This was clearly evident in Study 2, where narcissists lost
significantly more money from their investments than did their less
narcissistic counterparts, which was entirely explained by the risky
investments that narcissists made. Of course, it should be noted
here that had the stock market risen rather than fallen during Study
2, narcissists would most likely have performed better than other
participants in the study. In short, these results further demonstrate
what Paulhus (1998) labeled the ‘‘mixed-blessing’’ of narcissism,
that is, narcissism presents its host with a range of advantages
and disadvantages that are situationally dependent.
The results of these studies are also in line with prior research
that has linked narcissism with risky decision-making in other
domains. For example, Lakey and colleagues (2008) demonstrated
that narcissism is linked to pathological gambling. These authors
suggest that the link between narcissism and pathological
gambling is explained in part by what they refer to as narcissists’
.65 approach .39 portfolio -.94
motivation
volatility
portfolio
performance
Fig. 1. Structural equation model depicting narcissism and stock market investing. Latent variables are represented by ovals; manifest variables are represented by
rectangles. The numbers above the paths connecting the latent variables (and portfolio performance) are standardized regression weights. The numbers beside the paths
connecting the latent variables to their manifest indicators are estimated factor loadings.

820 J.D. Foster et al. / Personality and Individual Differences 50 (2011) 816–821
‘‘myopic focus on reward’’ (p. 131), which leads them to make high
risk wagers that ultimately result in more substantial losses. In a
similar vein, narcissists in Study 2 incurred greater financial losses
compared to less narcissistic participants because the stocks they
invested in were, on average, more volatile. This tendency appeared
to be fueled by approach motivation. It is interesting that
approach motivation, but not avoidance motivation best accounted
for the risky investing by narcissists. This finding is consistent with
recent research showing that narcissists engage in more general
risk-taking because of the benefits they think they will derive from
taking risks and not because they underestimate the level of risk
associated with risky behavior (Foster, Shenesey et al., 2010).
Cumulatively, these findings suggest that strong approach motivation
rather than weak avoidance motivation might be the driving
force behind narcissistic risk-taking.
Finally, the present studies’ results are also consistent with
Campbell, Goodie, and Foster’s (2004) research showing that narcissists
display overconfidence in their decision-making. For example,
narcissists faced with objective evidence that they will not
succeed at a task (e.g., poor performance in prior similar tasks)
tend to remain confident that they will succeed nonetheless. These
findings have been interpreted as reflecting a level of dysfunctional
overconfidence associated with narcissism. Although not directly
tested in their study, Campbell et al. (2004) suggested that narcissistic
overconfidence may be fueled by a strong approach orientation
whereby one focuses exclusively on potential positive
outcomes (i.e., task success). Study 2’s results support this
perspective.
In conclusion, the results of this research suggest that the motivational
disposition of narcissists makes them susceptible to problems
stemming from exuberant financial risk-taking, including
investing in highly volatile stocks. Future research will need to
examine how well these laboratory studies using college students
generalize to real-world investing. Future research should also
examine more thoroughly the process that underlies risky investing
by narcissists. Sub-goal scaffolding theory (Corr, 2008), for
example, in part suggests that approach motivated behavior often
involves restraint and planning (i.e., it is strategic), which distinguishes
it from purely impulsive behavior. Although we are inclined
to view risky investing by narcissists as approach
motivated behavior, we admittedly cannot rule out the possibility
that narcissists make risky investments out of sheer impulse. Future
research may address this by examining narcissists’ investment
decisions over longer periods of time and following
performance feedback. If narcissists’ risky investments consistently
perform poorly, more cautious future investing might indicate
planning and restraint characteristic of approach motivation.
Failure to modify their investment scheme, on the other hand,
might indicate impulsivity. Finally, we want to reiterate that we
do not think that narcissism is a purely maladaptive trait with regard
to investment decisions. Again, had the market performed
well during Study 2’s tracking period, narcissists would most likely
have outperformed their less narcissistic counterparts. Nevertheless,
during economic downturns it is probably best not to leave
investments in the hands of narcissists.
Appendix A. Plots used in stock picking exercise from Study 1
Stock. picking exercise
Below are the prices of four stocks during the past several years.
In general, all four stocks performed about the same, though some

obviously went up and down in price more than others. Currently,
they are each worth exactly $100 per share. Imagine that you have
saved up a significant amount of money and that you want to invest
it into one of these four stocks. Place a check mark next to
the stock that you would you buy?
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