Influence of Demographic factors on Investment Performance

Subramaniam, Arumugam; Velnampy, T.

doi:10.5296/ijafr.v7i1.11294

Cited by 3 publications

(3 citation statements)

References 4 publications

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“…Awais, Laber, Rasheed and Khursheed (2016) demonstrated that investment experience has significant effects on risk tolerance and investment decisions and that investment experience was positively correlated with risk tolerance. Subramaniam (2016) found that age, education, investment experience, and income were significantly associated with risk tolerance. Liu and Hon (2017) examined the correlation between personality traits and risk attitudes and revealed a significant correlation between extroversion and a preference for funds and derivatives and between conscientiousness and a preference for bonds, stocks, savings insurance, and other investment products.…”

Section: Risk Tolerancementioning

confidence: 96%

“…Cooper et al (2014) demonstrated that higher education levels were associated with greater risk tolerance. Subramaniam (2016) concluded that an investor's age, level of education, investment experience, and income have significant bearing on their risk tolerance. Shanmugam et al (2023) argued that demographic variables do not significantly influence investment decisions or risk attitudes.…”

Section: Differences In Demographic Variables and Risk Attitudesmentioning

confidence: 99%

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Risk Attitudes and Personality Traits Among Investors in Funds

Chen,

Hsiao

2024

IJMS

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How do an investor’s thoughts and feelings influence their behavior? Financial institutions must assess the risk attitudes of investors to ensure investors are being recommended appropriate financial products. This study is a further examination into whether risk attitudes are correlated with personality traits and to determine the risk attitudes of investors from different backgrounds. The risk attitudes of investors were examined according to the Big Five personality traits. Investor personality traits were linked to their investment decisions and risk attitudes. Differences in risk attitudes between investors from different backgrounds were also explored. A questionnaire survey was administered. Investors with fund investment experience were recruited. Correlations were observed between the Big Five personality traits and risk attitudes. Extroversion, agreeableness, conscientiousness, and openness to new experiences were positively correlated with risk attitudes, and neuroticism was inversely correlated with risk attitudes. These results indicated direct relationships between the Big Five personality traits and risk attitudes. This study also revealed significant differences in risk preferences between gender, marital status, discretionary budget, fund investment experience, and risk profile. The study results provide a broader reference for establishing investment risk profile charts that integrate personality traits into behavioral finance models in financial practices.

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Section: Risk Tolerancementioning

confidence: 96%

Section: Differences In Demographic Variables and Risk Attitudesmentioning

confidence: 99%

Risk Attitudes and Personality Traits Among Investors in Funds

Chen,

Hsiao

2024

IJMS

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“…However, over time, stocks can be perceived as highrisk investments. Many investors, regardless of risk, enter the stock market with the expectation of generating significant income [14]. Nevertheless, without a clear understanding of their risk tolerance, investors may struggle to determine the optimal investment plan that aligns with their financial goals.…”

Section: Introductionmentioning

confidence: 99%

An analysis of Risk Tolerance of Individual Investor using Gray Relational Analysis Method

2024

jbab

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Risk tolerance refers to an individual investor's inclination towards embracing fluctuations in investment values in pursuit of higher income. It reflects their capacity to endure such fluctuations and financial goals, time horizon and emotional comfort various including status influenced by factors. Personal preferences and investment choices with circumstances as it helps to regulate, informed investment decisions one's risk tolerance in taking understanding is important. financial situation, investment objectives, knowledge of the financial market, factors like experience, and emotional intelligence contribute to determining one's risk tolerance. Investors' risk tolerance is often assessed through questionnaires or evaluations conducted by financial advisors, which consider factors like attitudes towards risk, investment goals, time horizon, and financial situation. Based on the assessment, investors may be categorized into different risk profiles such as conservative, moderate, or aggressive, with corresponding investment strategies suggested accordingly. It's essential for investors to honestly evaluate and be realistic about their risk tolerance, as overestimating it may lead to excessive risk-taking and potential losses during market downturns, while underestimating it may result in overly conservative investment choices. Regular reviews of risk tolerance are recommended, especially in light of significant life events or market fluctuations. The concept of risk-return trade-off highlights that higher returns are typically associated with higher levels of risk, implying that investors expecting higher returns must be prepared to accept greater potential losses. However, risk tolerance isn't solely determined by financial factors; emotional elements such as fear, anxiety, and market sentiment also influence an investor's tolerance for risk and their behaviour during periods of volatility. Therefore, a comprehensive understanding of risk tolerance encompasses both financial considerations and emotional factors. the GRA (Grey Relational Analysis) approach at its inception, focusing on the concept of the gray gadget. This technique is particularly effective for selection problems involving multiple attributes within a component. The current literature highlights its applicability in addressing problems associated with multiple factors and variables, especially when dealing with complex relationships. The GRA approach is well-suited for resolving issues related to fixing problems, and various types of GRA techniques have been proposed in the field. The introduction of the GRA approach is both straightforward and environmentally friendly, making it a practical choice for addressing complex problems involving multiple variables. Investment Objectives, Time Horizon, Financial Situation, Knowledge and Experience and Liquidity Needs. Risk Assessment Questionnaires, Investment Experience and Knowledge, Financial Situation, Investment Goals and Emotional Attitude Towards Risk. the Rank of GRA for Risk Tolerance of Individual Investors. Liquidity Needs is got the first rank whereas the Low Risk Tolerance is having the Lowest rank.

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nvestigating the Effects of Behavioral Factors on Investment Performance in Nigerian Capital Market

Ibrahim

Umar

2017

NileJBE

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The study sought to investigate the effect of behavioral factors, including prospects on investment performance in Nigerian capital market using a cross sectional survey design was employed. A sample size of 160 staff was drawn from a population of 225 staff of active stock brokerage firms in Abuja. Data were collected by way of administered questionnaire and the analysis was done using a simple percentage and multiple regression analysis with the aid of SPSS the relationships between the behavioral factors and investment performance. The findings show that that there is a positive significant relationship between prospect factor and investment performance, It is recommended that investors should carefully consider and carry out research before making investment decisions and should not be carried away by their earlier loss for their future investment decisions. Emphasis should be made on probable cognitive errors such as representativeness, hindsight, illusion of control and availability biases and emotional biases such as regret aversion and over optimism. Also, training programs that create investor awareness in terms of the capacity to point out and protect against cognitive errors and emotional biases that lead to bad investment choices should be offered to prospective individual investors

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Influence of Demographic factors on Investment Performance

Cited by 3 publications

References 4 publications

Risk Attitudes and Personality Traits Among Investors in Funds

Risk Attitudes and Personality Traits Among Investors in Funds

An analysis of Risk Tolerance of Individual Investor using Gray Relational Analysis Method

nvestigating the Effects of Behavioral Factors on Investment Performance in Nigerian Capital Market

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