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Meir Statman: Reuters : Chinese Americans Saving Less, Risking More
Thursday, Mar. 3, 2011
Meir Statman, Glenn Klimek Professor of Finance, was recently quoted in a Reuters article titled “Chinese Americans Saving Less, Risking More.” The article is about new research from the University of Missouri that has found that Chinese Americans invest the majority of their earnings in the stock market, maintaining little in the way of cash or cash-equivalent assets.
The article asks why Chinese Americans seek more financial risk than Americans of other backgrounds. Statman’s response is that it is the collectivism of Chinese culture that accounts for the trend.
Statman is quoted in the article saying, ““People can afford to take risk because they know that if they take risk and they fail — for example, they can start a business that does not work or make an investment that doesn’t turn out well — they know there is going to be bread and water because they have the safety net of family. They can afford to take more risk, where as Americans know they don’t have the safety net of friends or family or they know that the safety net is not strong. That’s the cultural safety net.”
Read the full Reuters article here >>
Read Professor Statman’s bio here >>