A study on the effect of emotional intelligence on retail investors’ behavior

Pirayesh, Reza

doi:10.5267/j.msl.2013.11.037

Cited by 11 publications

(10 citation statements)

References 8 publications

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“…Pervez (2014) found that the lively understanding attributes of the cash related specialists are related to experience choices of the scholars. Pirayesh (2014) assessed the effect of stimulating information on theoretical frameworks of retail money related specialists in the Tehran Stock Exchange. He construed that there was a positive connection between stimulated learning and hypothesis decisions.…”

Section: Behavioral Biasesmentioning

confidence: 99%

How do emotional intelligence and behavioral biases of investors determine their investment decisions?

Raheja

Dhiman

2020

RAMJ

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Purpose In earlier studies, research has shown that EI is the only element, which influences the ways in which people develop in their lives, jobs and social skills control their emotions and get along with other people. It is EI that dictates the way people deal with one another and understand emotions. The research gap is to explore the impact of behavioral factors and investors psychology on their investment decision-making. Design/methodology/approach The information was gathered from 500 financial specialists. The region of research was the financial specialists who contribute through LSC Securities Ltd. in Punjab State. The purposive testing system was used in this examination. Findings The investigation found that the positive connection between the conduct predispositions of the financial specialists and venture choices of the speculators and positive connection between enthusiastic insight of the financial specialists and their venture choices. Yet, the authors found that the enthusiastic insight better foresees the venture choices of the financial specialists than the conduct predispositions of the speculators. Among the different elements of conduct inclinations of the speculator’s lament and carelessness are identified with the financial specialist’s venture choices. Among the various estimations of eager understanding – care, dealing with emotions, motivation, empathy and social aptitudes are related to the hypothesis decisions of the monetary pros. Research limitations/implications The sample selection was based on purposive sampling, rather than a random probability sample. The sample was area specific, restricted only to Ludhiana Stock Exchange in Punjab state. Therefore, the results of the study cannot be generalized with certainty to all the investors investing through other exchanges in other states. The inferences are based on the assumption that the data provided by the investors are true and correct. The findings may be relevant for other stock exchanges as that of the Ludhiana Stock Exchange. However, the authors do not claim the generalization of the results. Practical implications This study also helps to understand the relationship between investment decision-making and risk tolerance of investors. It will helpful for the financial advisors to know the behavioral biases of investors while making an investment decision, and therefore, they can advise investors properly to mitigate such biases. It may help the investors in understanding the subjective part of their behavior and control their emotions while taking decisions for their investment in stock market options. Social implications This research will help investment advisors and finance professionals to judge investors’ attitudes toward risk in a better way, which leads to better investment decisions. Originality/value This study is my own study and it is original and has not been published anywhere.

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Section: Behavioral Biasesmentioning

confidence: 99%

How do emotional intelligence and behavioral biases of investors determine their investment decisions?

Raheja

Dhiman

2020

RAMJ

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“…Okpara and Edwin (2014) found that workplace EI influence the return on investment. Pirayesh (2014) examined the effect of EI on investment strategies of retail investors in Tehran Stock Exchange. The data was collected from 270 investors.…”

Section: Review Of Literaturementioning

confidence: 99%

Do Personality Traits and Emotional Intelligence of Investors Determine Their Risk Tolerance?

Dhiman

Raheja

2018

Management and Labour Studies

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In today’s scenario, investment is very important in everyone’s life. Investors always prefer the investment avenues according to their suitability, risk and the return because there are different investment avenues available in the market. There are various factors that influence the risk tolerance behaviour of the investors, such as age, gender, marital status, experience, income, household expenditure, present and future savings, future expectations of returns and future planning of the investor. But the risk tolerance is also affected by the personality traits and emotional intelligence (EI) of the investors. Thus, the present study focuses on the relation between the personality traits, EI and risk tolerance of the investors. The data was collected from 500 investors who invest through LSC Securities Ltd (formerly LSE Securities Ltd) in Punjab by using structured questionnaire. Multiple regression test was applied through SPSS to test the significance of relationship among the variables. The study found the relation of risk tolerance with personality traits and EI to be statistically significant.

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“…Ezadinea, Fathi, and Salami [28] also demonstrated the effects of EI on financial behavior biases and investment performance. Pirayesh [29] carried out an empirical study from which it was concluded that there was a relationship between global EI and the investors' decision, pointing out that investors with a high level of EI had a greater riskaversion, understood as mistrust that the individual manifests to accept an offer with an uncertain result compared to another offer with a less profitable but safer result [30]. On the other hand, Tanvir, Sufyan, and Ahsan [31] used Goleman's (1998) five dimensions of EI and demonstrated that there was an influence of global EI and some emotional competencies (emotion regulation, self-motivation, and trait empathy) in the investor decision-making process.…”

Section: Emotions and Financial Behaviormentioning

confidence: 99%

“…Finally, and referring to global EI, we were also able to observe a deficit of students with respect to professionals. This aspect can lead them to have greater endowment bias, self-control, optimism bias, risk aversion, and regret aversion [29]. On the contrary, and due to this deficit in global EI, students were more risk averse than professionals, so they may tend not to analyze investment risk well.…”

Section: Impact Analysismentioning

confidence: 99%

A Study of the Emotional Intelligence and Personality Traits of University Finance Students

et al. 2021

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Studies on financial behavior indicate that emotional intelligence (EI) and personality traits (PTs) explain much of the bias in financial activity. This study aims to identify in which dimensions of theEI and PTs of university students in finance further training is needed to avoid financial behavior bias. To this end, the EI and PT levels of a sample of university finance students and financial industry professionals were compared using the Trait Emotional Intelligence Questionnaire (TEIQue) and Big Five Inventory questionnaire. Subsequently, the dimensions of EI and PTs in which students have a deficit compared to professionals were identified, and the impacts that this deficit causes on the financial behavior of students were determined. The results indicate that students are deficient in the EI competencies related to empathy, emotion regulation, self-motivation, stress management, optimism, and self-esteem. Furthermore, PTs are related to kindness, awareness, openness, and extraversion. This deficit makes students more likely to have financial behavior biases such as risk tolerance, endowment, optimism, self-control, and loss aversion. These findings suggest that universities should be aware of providing financial students with full training in EI and PTs to help them successfully address their professional future.

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A study on the effect of emotional intelligence on retail investors’ behavior

Cited by 11 publications

References 8 publications

How do emotional intelligence and behavioral biases of investors determine their investment decisions?

How do emotional intelligence and behavioral biases of investors determine their investment decisions?

Do Personality Traits and Emotional Intelligence of Investors Determine Their Risk Tolerance?

A Study of the Emotional Intelligence and Personality Traits of University Finance Students

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