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By Christine Benz | 09-29-2010 05:19 PM

Better Investing Through Science?

Science may one day be able to identify and treat people who have a genetic predisposition to spend impulsively versus save for the future, says Wall Street Journal columnist Jason Zweig.

Christine Benz: Hi, I'm Christine Benz for Morningstar.com.

I'm here today at the Wall Street Journal's office, and I'm joined by Jason Zweig. Jason is personal finance columnist for the Journal, and he's also author of several books about money and investing.

Jason, so nice to see you. Great to be here with you.

Jason Zweig: Thanks, Christine. Thanks for coming.

Benz: So, Jason, you're always up-to-date on the latest in the realm of academic finance, and the latest literature about what the academics are seeing and saying.

What are some studies that you've come across recently that have piqued your interest?

Zweig: Well, I think, there are a couple of areas that are very new and exciting, Christine. One that I've been sort of paying a lot of attention to out of the corner of my eye is what's come to be called genoeconomics, which is a study of essentially how our DNA interacts with our financial decision making, and scientists have already identified several genes that seem to be implicated in controlling impulsive behaviors.

So that down the road one of the hopes is that if people can come up with perhaps a drug treatment or a behavioral treatment, you may be able to identify people who have a genetic predisposition toward being impulsive, for example. So that you may eventually get to the point where you can help people save for the future and set aside their impulsive reluctance to set money aside.

This could be a huge breakthrough although this kind of research generally takes many years to pay off and it's still in very early stage, but down the road, I think, we'll be able to help people either with drugs or therapy who have a variety of financial dysfunction.

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