What Do Investors Want?

Abstract

Diners want more than the utilitarian benefits of low cost and high nutrition when they choose restaurants, they want the utilitarian benefits of palatability, ambiance and conformity to culture. And they also want the expressive benefits of status, patriotism and social responsibility. Similarly, investors want more than the utilitarian benefits of low risk and high expected returns when they choose investments, they want additional utilitarian benefits and they want expressive benefits as well.

Restaurant journals discuss both the utilitarian benefits of restaurants and their expressive ones, but finance journals are confined to the utilitarian benefits of low risk and high expected returns. I hope that the expressive benefits of investments would be discussed in future issues of finance journals and offer in this article some thoughts about the future of the investment profession and its business.

Keywords: Behavioral portfolio theory, utilitarian characteristics, behavioral asset pricing theory, behavioral finance

JEL Classification: G11, G14