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Opinion
Barry Ritholtz

Childhood Trauma and the Active Fund Manager

Experiencing divorce or death of a close family member tends to lead to risk aversion in adulthood.

A future of risk avoidance?

A future of risk avoidance?

Photographer: Fox Photos/Hulton Archive/Getty Images

If you are in the market for an active fund manager, you might want to skip the usual questions about Sharpe ratios, investment philosophy and past track record.

Instead, consider asking about their childhood experiences, especially those that inflicted emotional stress or trauma. Did your parents divorce when you were young? Were there any premature deaths in the immediate family? How did you feel when Rover, after biting the mail carrier, was sent to that “farm” in the country?