Personality Traits and Risk Perception of Indian Investors (original) (raw)
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Personality Traits and Risk Profile Influencing Attitude of Investor
Paripex Indian Journal Of Research, 2015
Behavioural finance is an emerging field to understand the psychology of the investor in various investment avenues. In the present scenario investment in stock market plays a vital role. Investment in this avenue is made by both individual and by institutions. ULIP, Mutual funds set an example as institutions investing in stock market. The present study aims to study the relationship between personality traits (big five model) and risk profile of the investors attitude. The result of the research study proves that the personality traits do not have much influence towards the attitude of the investor as the investor most wisely invest in diversified portfolio to minimize their risk. Moreover the investor invests mainly for tax gaining purpose and to meet their future expenses.
Personality Traits and Investment Choices of Investor
International Journal of All Research Education \& Scientific Methods 9 (6 {\ldots}, 2021
Behavioural finance, which considers human behaviour in finance, is a relatively recent field, despite the fact that finance has been studied for thousands of years. Behavioural finance models, which are focused entirely on psychology, attempt to comprehend how emotions and personality influence the behaviour of individual traders. The study's main aim is to look at the behavioural factors that influence individual buyers' decisions on the NSE and BSE Stock Exchanges. The data collected from the Students, Professionals through structured questionnaire were examined and data collected were analysed using Cronbach's Alpha Reliability Test, based totally on which, hypotheses are proposed. The theories are then tested using questionnaires provided to individual customers, college students, and practitioners. The result indicates that there are five personality traits affecting the funding selections of person investors at the NSE & BSE Stock Exchange: extraversion, agreeableness, openness to experience, conscientiousness, and neuroticism. This takes a look at also tries to discover the correlation among these personality traits and investment overall performance. Every investor has a unique set of circumstances and interests, and therefore a unique perspective on financial risk and financial objectives. Investors vary in terms of their locus of influence as well as their personality traits. The findings reveal that the aspects of neuroticism, extraversion, and openness to experience have a fine mediated relationship with the investors' investment portfolio. All the personality traits have the significant relationship with the investment choices. Psychographic considerations play a significant role in deciding an individual's investing behaviour. Investment decisions carry inherent risks in themselves. A person's risk assessment is influenced by a variety of influences, one of which is the collection of personality characteristics he or she possesses. Furthermore, each individual is unique and has different financial goals. Individuals can be classified into personality groups depending on their individual psychology, which influences the investor's risk mindset and, as a result, his investment plans.The decision-making process for an individual investor can be seen as a constant process that has a profound effect on their psychology when making investment decisions. To recognise and interpret investment choices, behavioural finance focuses on individual and social recognition testing as well as emotional tolerance tests. Behavioural finance, which considers human behaviour in finance, is a relatively recent field, despite the fact that finance has been studied for thousands of years. Behavioural finance models, which are focused entirely on psychology, attempt to comprehend how emotions and personality influence the behaviour of individual traders. In the current economy, capital market investing is critical.The study's main aim is to look at the behavioural factors that influence individual buyers' decisions on the NSE and BSE Stock Exchanges. The present study aims to study the relationship between personality traits (big five model) and the investment choices of investor. The data collected from the Students, Professionals through structured questionnaire were examined and data collected were analysed using Cronbach's Alpha Reliability Test, based totally on which, hypotheses are proposed. The theories are then tested using questionnaires provided to individual customers, college students. The result of the research study proves that the personality traits have influence towards the choices of the investor. The findings reveal that all five personality traits have the significant relationship with the investment choices.
The Journal of Asian Finance, Economics and Business
This empirical research is aimed at testing the relationship of the big five personality traits namely openness to experience, extraversion, consciousness, agreeableness, neuroticism, and risk aversion with the investment intention of individual investors belonging to Balochistan, Pakistan. The primary data is collected through a self-administered questionnaire (a structured form that consists of a series of closed-ended and open-ended questions) from a sample of 397 active individual investors belonging to different districts of the province. The data is empirically analyzed by applying the Partial Least Square (PLS) path modeling technique by using the estimation package available in Smart-PLS. The findings of this study suggest that all the variables are statistically significant with investors' investment intention with risk aversion as the strongest predictor. Moreover, openness to experience, extraversion, consciousness, agreeableness, and risk are significantly and positively related to an investor's investment intention, whereas neuroticism is negatively related to an investor's investment intention. The results extended by this study can be used by financial planners and investment bankers to channelize the available financial resources in diversified portfolios. The results will help financial planners to make available diverse investment alternatives for investors in Balochistan, thus catering to their unique needs. Academia must offer courses on contemporary finance paradigm based on behavioral finance to enable future business graduates to make wise financial decisions.
Impact of Personality Traits on Stock Market Investors with Regard to Risk Tolerance
Journal of Pharmaceutical Negative Results, 2022
The study examines the impact of personality traits on investment decisions based on the big-five model. A total of 100 responses from Cochin were collected using the convenience sampling technique. The five-point Likert scale questionnaire was used alongside the Smart-PLS software for data analysis. The results suggest that personality traits did have a significant effect on investment decisions through agreeableness, conscientiousness and extraversion. However, risk tolerance has a significant negative impact on investment decisions through openness to experience and a significant positive impact through neuroticism. The study helps improve our understanding of investor behaviour by considering the mediating role of big five personality traits on the relationship between risk tolerance and investment decisions. It is recommended that financial institutions should provide investment counselling services to prospective investors using the consumer profile technique.
Impact of Personality Traits on Risk Tolerance and Investors' Decision Making
2019
This article investigates the relationships between personality traits, risk tolerance, and investment decisions and highlights the importance of personality traits in determining risk tolerance levels and investment decisions. Personality traits are classified according to the Big Five taxonomy: extroversion, agreeableness, conscientiousness, neuroticism and openness to experience. Primary data was collected from 330 individual investors from Islamabad. Descriptive analysis of the data was run on SPSS, reliability of the constructs was assessed through Confirmatory Factor Analysis (CFA), whereas, Structural Equational Modelling (SEM) was used to conduct hypothesis testing through path analysis. As per the results of CFA, the constructs were found to be reliable. Mediation analysis confirmed that risk tolerance partially mediated the relationship between personality traits and investment decisions. This study and results have theoretical and practical implications for the investors,...
2019
Understanding the financial personality aids in comprehending the rationale behind an individual's decision making related to investment, how that individual is going to react to the uncertainties involved in investing and as to how that individual can offset the irrational components of investment decisions while still gratifying the individual inclinations. The options for investments are enormous and they have different options of risk-return trade-off. Investment can take the form of debt securities, mutual funds, stocks, life insurances, derivatives, commodities and real estate. Each investor wishes to select the best available options so as to maximize his returns. The average Indian investor, in the recent years, has endured a sluggish economy, faced abrupt market declines driven by declining revenues, shocking reports of scandals and changes in the global economy. The performance of stock markets is not only the outcome of intelligible characteristics, but can also be at...
Personality Traits and Behavioral Biases of Indian Investors
2019
Individuals' investment decision is affected by several factors, which are generally related to stock market or investors' demographics and their individual personalities. The present study is an attempt to find out the impact of individual investors' personality traits (MBTI Test) on their investment behavior by using two most prominent behavioral biases i.e. Overconfidence bias and Herding bias. Data has been collected from 1,000 individual investors across India by using convenience sampling and sending a structured questionnaire to the respondents, online and offline. For the data analysis, descriptive analysis and regression analysis have been run through SPSS version 24. The results of the study have indicated a strong relation between the behavioral biases (Overconfidence and Herding) and the personality traits (MBTI personality traits) of individual investors in India. The results of the study would be very useful for the individual investors in identifying their...
OPUS, 2017
Times are changing and so are investors, investment options and investment managers. Investment managers need to bring together a dynamic mix of understanding of the financial market and the investor's profile. The study is aimed at identifying relationship between demographic variables, risk taking behaviour, investor biases, investment pattern and MBTI personality assessment of investors in India. Myers-Briggs Type Indicator (MBTI) is an individual personality preference instrument; which has been used in this paper to predict investment biases. This relationship should throw some light on how should investment managers respond to changing investment behavior based on investors' personality types. It was seen that most of the sample investors are balanced or conservative in terms of their investment behaviour. MBTI personality types are a significant factor which affects risk taking behaviour of investors. Age, gender, work place activity, marital status are non significant factors to shape up investor`s risk taking behaviour. The results of this study can be highly useful for investment advisors, portfolio managers, and financial investment agencies as they can choose and define a product for their clients based on their gender, age, work experience, marital status, personality type and risk taking attitude. The investment advisors should try to evaluate personality of their client before offering them any product.
Personality Traits and Risk Tolerance among Young Investors
VOLUME-8 ISSUE-10, AUGUST 2019, REGULAR ISSUE, 2019
India is a developing nation with highest number of youths in world. The youth is growing in the era of internet, least fare Wi-Fi connections. They have ample of knowledge available at one click. For any decision they search multiple options which give them sense that they are opting for the best and will reduce the chances of setbacks. Although every individual vary in their risk taking capacity and the capacity to tolerate setbacks is mostly related to kind of personality characteristics an individual carry. Present study is an attempt to identify the kind of relationship between personality types in (BIG Five model) and risk tolerance among youth. There are five personality traits measured through BIG Five namely; Extraversion, Agreeableness, Conscientiousness, Neuroticism (Emotional Instability) and Openness to Experience. The study intended to ask whether these personality types play an important role in deciding tolerance behavior among young investors. The data was collected...
The Personality Process of the Investor
SSRN Electronic Journal, 2013
The economic activity of investment is to be understood from the perspectives of economics and behavioral sciences. The behavioral process of personality is an important source of influence in determining high and low investment. The construct of economic personality explains the personality processes related to the economic context. Using the variables of financial resources and the nature of psychological processes, four different types of investors, star, realistic, greedy and sluggish may be identified. The core psychological processes of achievement motivation, locus of control, goal setting orientation, self-efficacy and risk taking behavior, expressed in positive and negative forms lead to high and low investment