is unwillingness to invest in non-traditional asset class and invest majority in traditional asset class a form of status quo or familiarity? I’m so confused with these psy traps
Isn’t it conservativism or fear or regret/loss aversion? Familiarity I thought was investing in your employers stock or just domestically based on your “familiarity” with those investments. Status quo I thought had to do with 401 k investors that make an initial allocation and then never change it.
if they don´t want to change what they already have = status quo if they don´t want to buy it because they have no knowledge about them = familiarity also, I guess status quo only applies in def.con.plans, but familiarity can apply in situations where a single individual only buys stocks from his own country (home country bias), for example hope it helps
Just throw it out to discuss The question is in Schweser’s Practice exam Vol 1 exam 1 morning Q3 I chose familiarity, Schweser says Status Quo. I think halamadrid answered the question: people already invested in non-traditional asset and don’t want to change. The question made no implication about how familiar people are towards non-traditional, so Status quo is the way to go. Need to read the situation really careful next time Thanks
The contrast is by SQ, you start at an allocation and you don’t change it EVER (even if equities are projected to be depressed for the next year), you keep your allocation.