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Advisor Insights

How to Advise Extraverts

Contributor Michael Pompian offers ideas for working with this personality, which is prone to overconfidence.

This is the fourth article in a series focusing on the Big Five personality traits and how they relate to the behavioral biases of investors. Over the years, I have followed a debate between the effectiveness of the Myers-Briggs test versus another widely used personality test, the Big Five. More recently, the debate has intensified. I decided to conduct a study of the Big Five. Specifically, I studied 121 investors, examining the relationship between the Big Five and investor biases. Why? Because taking the time to understand the underlying personality of the investor leads to better advice and results.

This month's article suggests how to advise extraverts. As a quick refresher, extraversion (also known as extroversion) is a trait described by talkativeness, assertiveness, and expressiveness. People high in extraversion are outgoing and get energy from the people around them. Being in social situations makes them feel energetic or even excited. People who are low in extraversion (also known as introversion) tend to be reserved and have to expend energy in social settings.  They often prefer to be "in the corner" away from others.