Financial risk tolerance refers to the degree of uncertainty an investor is willing to accept, and can often be influenced by individual characteristics. However, personal psychological preferences play a prominent role in an investor's judgement and relationship with their finances. Limited research has been done on investors to see whether their type of personality will influence the level of risk they are willing to tolerate and ultimately the performance of their asset portfolios. Therefore, this article aids toward the contribution in understanding how personality traits can influence financial decision-making. The secondary data for this article was purposefully collected by an investment company using a quantitative questionnaire, which was electronically distributed to 600 investors within the South African market. The results of this study indicated that different personalities prefer different levels of risk. Individuals who are more open to experience, indicated a significant difference in risk tolerance levels compared to other personality types. The results for this article were comparable to previous research where only some of the personality traits play a role in investment decisions.
Satisfaction with life is not always a set concept and may vary according to the demography of investors. Demographical factors can classify investors into various categories of life satisfaction, which can ultimately impact investment decisions. The level of life satisfaction can influence investment by causing a deviation between expected and actual investment choices. Gender can be grouped between males and females with different investment decisions based on each group's satisfaction with life.The aim of this study is to determine the satisfaction with life of investors considering their gender, age group, ethnicity, income group and marital status. The results of the study show that male investors are more likely to have a positive life satisfaction and make optimistic investment choices compared to female investors. Investors who are older than 50 years of age, married or earn more than R700 000 annually are more likely to have a positive life satisfaction and make more optimistic investment choices, while investors with a negative life satisfaction are more likely to make pessimistic investment choices.
Financial well-being can be perceived as a function of an individual's physical and emotional factors pertaining to their financial position and the level of satisfaction they feel in terms of their financial status. This research study aimed to place investors in a certain category of financial well-being based on their race. Data for this article was purposefully collected using a quantitative questionnaire which was electronically distributed to 600 investors within the South African market. A self-report measure for financial well-being was used where participants had to rate their own level of financial well-being. This research found that there are statistically significant differences in individuals' level of financial well-being amongst different groups of race. More specifically, results suggest that White individuals have a higher perceived level of financial well-being compared to their Black, Indian, and Coloured counterparts. However, no significant difference was found between the racial groups as low financial well-being was dominant in all four groups. Higher levels of perceived financial well-being will lead to more optimistic investment decisions which will be constructive to portfolio asset managers in creating investor profiles.
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