IIJSR Current Issue

International Interdisciplinary Journal of Scholarly Research
ISSN 2412-303X


ContentsJanuary 2019
Volume 5, Issue 1  

Title: Factors Impacting Investment Decision Making: A Mediation of Risk Tolerance and Moderation of Demographic Variables

Abstract: The purpose of this paper was to find out the impact of Personality Traits, Behavioral Biases, Financial Literacy and Intention towards Investment on Investment Decision Making while taking Risk Tolerance as a mediator and Demographic variables as moderators. As with time the behavior of individual changes, there are different factors that may influence their decisions. Many factors including risk, vagueness and different choices come into contact when investor is willing to make decisions. Sometimes the choices made by investors may result in profit making while other time when wrong judgment are made may result in loss. From prior researches it has been found that there is a need to study various psychological factors on investor’s decision making. The objective of the study is to study the impact of investor intention, biasness, financial literacy and personality traits of investors on the investment decision making while focusing on the mediating role of risk tolerance. In the theoretical framework we tested the association of independent variable including behavioral biases and its sub variables (Herd behavior, over confidence, openness to experience, disposition effect), Personality traits (Neuroticism, Extraversion, Agreeableness, Openness to experience, Conscientiousness), Financial Literacy and Investor Intentions on dependent variable i.e. investment decision making with risk tolerance as a mediator and Demographic variables as moderators. The sample for this study comprised individuals who are experienced and have invested in stock market. The sample size of our study was 261. The sample participants have received basic education in Accounts and Finance and they have invested in stock market and works in financial institutions. SPSS, AMOS and EXCEL were used for performing Regression, CFA, reliability and validity of models, model fitness test. The findings revealed that personality traits, intention towards investment and financial literacy have impact on an individual’s risk-tolerance behavior, which, in turn, influences investment decisions about Financial Securities. Thus the findings suggested that for the investment advisors it is better to consider various personality traits, financial literacy and individual risk tolerance when making investment decisions for securities. For future research other psychological and behavioral factors can be tested.

Author/s: Amin, M.Z., Yawer, M., Dr. Ali, S.A.
Pages: 01-36


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