All Investments Lie on a Spectrum Defined by Utilitarian, Expressive, and Emotional Returns: Stocks, Bonds, Houses, Paintings, Coins, Even Handbags

We ordinarily differentiate investments such as stocks and bonds from investments such as paintings and coins, perceiving stocks and bonds as providing only utilitarian returns and paintings and coins as also providing expressive and emotional returns. I argue that all investments and investment behavior lie on a spectrum defined by the three returns. I illustrate my argument with examples such as the reluctance to realize losses, the practice of investing according to our values, and the persistence of dollar-cost-averaging. I distinguish preferences for expressive and emotional returns from expressive and emotional errors and discuss their implications for the work of financial advisers.