Does personality traits and emotional intelligence influence investment decisions of investors?

Dhiman, Babli; Raheja, Saloni

doi:10.5958/2249-7315.2017.00369.0

Cited by 3 publications

(2 citation statements)

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“…There is a lot of criticism on the idea of investors' behaviour rationality (Nofsinger, 2001) as rationality of investors' behaviour is hard to describe, because it is often unpredictable (Oprean, 2014). Behavioural finance offers the signal that human behaviour is reversible which could be predicted (Dhiman & Raheja, 2017;Forbes, 2009;Subrahmanyam, 2008). Many behavioural biases in which investors indulge at the time of investment have been recognized as significant in providing a better understanding of individual investors' behaviour (Kumar & Goyal, 2016).…”

Section: Rationality Of Investors' Behaviour Remained At the Centre O...mentioning

confidence: 99%

The Influence of behavioural biases on Investment Decision Making: A Moderating Role of Religiosity among Pakistani Investors

Waseem-Ul-Hameed

Sabir

Razzaq³

et al. 2018

IJMRES

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This research study evaluated the extent to which psychological factors (overconfidence, confirmation bias) effect on investor’s decision-making process. The ultimate objective of the current study is to investigate the effect of psychological factors on investor investment decision making. To achieve this objective, this study used quantitative approach and cross-sectional research design. Survey was used to collect the data. Questionnaires were distributed among the individual investors and brokers of stock exchange in Pakistan. Smart PLS 3 was used to analyse the data. It was found that overconfidence and confirmation bias have significant effect on investors investment decision making. Moreover, it is found that religiosity has moderating effect between the psychological factors and investors’ investment decision making. Majorly, the current study contributed by investigating the moderating role of religiosity between psychological factors and investor investment decision making.

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Section: Rationality Of Investors' Behaviour Remained At the Centre O...mentioning

confidence: 99%

The Influence of behavioural biases on Investment Decision Making: A Moderating Role of Religiosity among Pakistani Investors

Waseem-Ul-Hameed

Sabir

Razzaq³

et al. 2018

IJMRES

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“…Risk comes inbuilt with investment as most options carry varied level of risk, when it comes to making decision role of risk come in to play. Risk includes all those modes of investment where probability of financial loss or gain is uncertain (Raheja & Dhiman, 2017). It is generally viewed that higher the risk higher should be returns.…”

Section: Introductionmentioning

confidence: 99%

Personality Traits and Risk Tolerance among Young Investors

Mathur¹,

Nathani²

2019

IJITEE

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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 on a five point scale for all five personality traits. Each trait was evaluated through five statements on a scale developed by Mayfield, Perdue & Wooten (2008) modified by Wong, Chuah, Kui, Soo & Ang (2016). There were 25 statements in totality for measuring personality traits. The data was collected for risk tolerance, inclusive of eight items developed by Grable and Lytton (1999). There were 102 respondents from whom data was collected. The sampling respondents were in the age range of 22 to 27 years, who either have just started earning or having less than 5 years of total earning tenure. These investors are considered a bit selective but high in risk tolerance. We also intend to find out the kind of relationship between variables. Results indicated that Agreeableness, Neuroticism and Openness were strongly correlated to risk tolerance, but there was no significant relationship of extraversion and conscientiousness with risk tolerance. Furthermore, risk tolerance was checked on the basis of gender. The results indicated that there was no difference in risk tolerance of male and female investors unlikely suggested by Mishra, Lalumiere & William (2011) who stated that risk propensity varies from male to female.

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Individual Investors Financial Risk Tolerance and Personality Traits. A Systematic Review and Future Research Direction

Mukhtar,

Jan

2023

Integr. J. Res. Arts Humanities

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Purpose: Using a systematic literature review the papers investigated the relationship between various personality traits and the volatility of financial risk tolerance levels of investors. Further, the study analyzed and foundational work that has gone into making behavioural finance a well-established and distinct field of study over the years. The behavioural tendencies of individual investors, institutional investors, and financial advisors have also been included in this study. Design/Methodology/Approach: The research papers were assessed using the Scopus database, published journals, conference proceedings, and working papers, using keywords related to behavioural finance. These papers were gathered from 1967 which laid the groundwork for this subject to 2021. These articles are divided into categories according to personality traits, year, country, and author. All research instruments connected to primary and secondary data that writers have utilized have been shown in this paper Findings: The findings of this study suggest that research on financial markets has been overtaken by a new era of studying human emotions, behaviour, and attitudes. Moreover, not only are academics paying attention to this field, but so are corporations, financial intermediaries, and entrepreneurs. Individual and institutional investors, as well as financial advisors, are the primary focus of the research, but the behaviour of the financial intermediary through which most of these investors invest should also be examined. It allows researchers to focus on a smaller subset of the population while also examining emerging economies in search of new theories. The findings of this study have been described in the form of tables, which include the big five personality trait model and their impact on risk tolerance levels among investors. Research Limitations/Implications: Based on recent research, this study provides an overview of the most significant developments in this field. So far, there have been only a few comprehensive reviews of behavioural finance studies have been published. Now researchers in this field will benefit from this study's findings, as well as those who are looking for areas to focus their efforts. The use of only the Scopus database is the limitation of this study, the use of the web of science could have provided much more details. Practical implications: A practical implication of the research is that corporations, policymakers, and securities issuers can keep investors' interests in mind before introducing security s into the market. Social Implications: Investors can get well acquainted with their personality type and risk tolerance level which will help them in making better investment decisions and thereby reduce risk. Originality/Value: The focus of this work is the review of existing research on the big five personality trait model about the risk tolerance level of investors. The research is also based on investment decision-making literature. Some new concepts and theories of behavioural finance will be discussed in this paper in addition to the more established ones. Consequently, the study encourages readers to look for solutions that limit the impact of personality traits on risk tolerance and thereby in making decisions.

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Does personality traits and emotional intelligence influence investment decisions of investors?

Cited by 3 publications

References 0 publications

The Influence of behavioural biases on Investment Decision Making: A Moderating Role of Religiosity among Pakistani Investors

The Influence of behavioural biases on Investment Decision Making: A Moderating Role of Religiosity among Pakistani Investors

Personality Traits and Risk Tolerance among Young Investors

Individual Investors Financial Risk Tolerance and Personality Traits. A Systematic Review and Future Research Direction

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