Nowadays, new researches have shown that due to the negative effects of testosterone upon the financial market, a man’s nature can very well change and adopt an irrational behavior.
After conducting experiments on a variety of people, scientist have reached the conclusion that along with the growth of hormone levels, in particular testosterone, investors have ended up taking risky decisions that could possibly affect their assets. Scientist have been able to prove that two important hormones, cortisol and testosterone are the leading causes that force professional stockbrokers to take frantic decisions.
It is due to their working environment and to the stressful and challenging situations that one may face within such a place, that a person who has been given a dose of testosterone is more likely to take higher risks. Published in the journal of Scientific Reports, the study has aimed to underline how the administration of such fluids within the blood line, would sooner or later implement the ‘traders’ to take harsher decisions.
By managing to simulate such stressful conditions and by creating the perfect environment, scientist have been granted the opportunity to keep under close observation the changes which would take place in the hormones of each participant. It is due to this study, that people can better understand how the hormonal changes not only affect the behavior of traders’ during financial imbalance, but also each and every one of us, individually.
While both cortisol and testosterone both seem to have a major influence on the human being and appear to share a connection with one another, taken separately, they carry out different roles. On the one hand, the level of cortisol has always increased due to the physical and psychological stress, thus, the blood sugar within the human body ultimately increases and permits the ‘trader’ to adopt a more erratic behavior.
On the other hand, testosterone is nothing more than a mere stress reliever which in some way resembles the placebo effect. Therefore, the participants that were given doses of testosterone enjoyed the benefits of a more optimistic and carefree attitude, which will allow them to be more confident about the financial decisions that they will have to make.
Therefore, the study has shown that the levels of both testosterone and cortisol, no matter high or low, is highly affected by the stressful and competing environment. Although it may not seem as a possible threat, the results have suggested that changes in these two can surely ‘play a destabilizing role in financial markets through increased risk-taking behavior’.