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The music did it

This article originally published in The Northern Daily Leader on 3 March 2012.

The human memory is an intriguing phenomenon. I’m always amazed that I can remember an off-hand comment from over twenty years ago, yet I can still forget someone’s name two minutes after being introduced to them. A while ago I decided to make an effort to improve my memory and bought a book which promised to teach me all the secret techniques to boosting your memory, but I’ve forgotten where I put it after I brought it home, which wasn’t much of a help.

It’s also remarkable how sights, sounds and smells can jog our memories, instantly reminding us of places or events long past. Music in particular is very effective at transporting you back to a certain time or place. When I hear Ennio Morricone’s classic theme song from The Good, the Bad and the Ugly, it immediately takes me back to the late 70’s, sitting on the shagpile rug on the lounge floor while my parents listened to the soundtrack on their vinyl record player, eating Swedish meatballs and a cheese fondue. On the other hand, a power love ballad from Whitney Houston reminds me of teenage parties where we hung out with our acid wash jeans, leather jackets and big hair, furtively sneaking sips from a can of beer we’d stolen from Dad’s fridge.

It probably comes as no surprise to hear that music in particular affects not only our memory, but also our mood. However it is surprising that music can affect our willingness to take risks, particularly with regards to gambling or investing. Recently researchers in Sweden conducted a study where they measured the willingness of participants to take financial risks while listening to either their favourite music, music they disliked or no music at all. They found that while listening to music we like, we’re likely to be more aggressive than usual in taking on risk – in the experiment the participants were prepared to bet above average amounts on wagers, despite their chances of winning being no higher. Conversely however, the study showed that while listening to music we dislike, we’re far more cautious and less willing to make gambles or bets.

It’s not hard to apply the findings of the study to the investment world – you might find yourself sitting at home listening to your favourite album, just checking out your online broking account, when the urge takes you to invest all your money in some fly-by-night, speculative mining exploration company. My advice is to step away from the computer, put on a heavy metal album and wait for the urge to pass. The financial savings could be well worth the resulting headache.