Diane Schooley-Pettis, COBE associate dean and professor of finance co-authored an article with Debra Worden (George Fox University) that was recently published in the Journal of Financial Counseling and Planning. The article, “Perceived and Realized Risk Tolerance: Changes During the 2008 Financial Crisis,” examines the common belief that the financial crisis caused households to become less tolerant of financial risk. The study’s findings reveal that only some households became less risk tolerant. Change in risk tolerance is related to perceived risk tolerance, education, life cycle stage and employment status. The paper suggests that in practice, single households, or those households whose head is less educated, or self-employed or unemployed, may need financial advice to prevent them from reducing their portfolio risk in reaction to a financial crisis.
The Journal of Financial Counseling and Planning is the leading publication of the Association for Financial Counseling & Planning Education.