An article reported on the 25th of April in the Courier Mail, and in a variety of other media outlets, that intelligence was not a relevant factor in investment success.
The report was based on a study published in the 'Intelligence' journal, by the author Jay Zagorsky from Ohio State University.
This should be good news for everybody, as it demonstrates that a huge intellectual capacity is NOT required for financial success. Indeed, if the basic steps to financial success are spending less than you earn, investing regularly in a diversified portfolio of growth assets and so on - well then it does not take great intelligence to do that.
Indeed, there is evidence to show that a large IQ MAY BE A DISADVANTAGE for investment success.
MENSA, a group for people with the highest of IQ's have an investment club. Larry E. Swedroe, in his book Rational Investing in Irrational Times wrote that:
"The June 2001 issue of Smart Money (a US Investment Magazine) reported that over the past fifteen years the Mensa investment club returned just 2.5%, underperforming the S&P 500 Index by almost 13% per annum." (RIIIT, pg 6-7)
It really shows that intelligence is not an attribute rewarded by the market. If I had to guess intelligence would lead people to actively try and think of ways to outguess and beat the market. They would have been better with a buy and hold index strategy. So would pretty much everyone!