A model for female South African investors' financial risk tolerance

A model for female South African investors' financial risk tolerance

Research relating to the influence of investor's demographic factors and personality traits on financial risk tolerance receives increasing attention. Financial risk tolerance refers to the degree of uncertainty an investor is willing to bear, with regards to the financial risks taken on. The i...

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Bibliographic Details
Published in:Cogent economics & finance Vol. 8; no. 1; pp. 1 - 14
Main Authors: Lawrenson, Jessica, Dickason Koekemoer, Zandri
Format: Journal Article
Language:English
Published: Abingdon Taylor & Francis 2020
Cogent
Taylor & Francis Ltd
Taylor & Francis Group
Subjects:
Demography
education
female investor
Females
gender
Investments
Investors
Personality
Personality traits
Portfolio management
Portfolios
risk tolerance
structural equation model
Structural equation modeling
Tolerance
Uncertainty
South Africa
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Summary:Research relating to the influence of investor's demographic factors and personality traits on financial risk tolerance receives increasing attention. Financial risk tolerance refers to the degree of uncertainty an investor is willing to bear, with regards to the financial risks taken on. The investor's personality refers to the stable characteristics an individual tends to display in any given situation. Personality traits may therefore also be considered as a driver in investor financial decisions. Understanding the influence gender and personality traits have on an investor's financial risk tolerance, will assist in predicting their financial and investment decisions with regards to their asset portfolios. The purpose of this article is to develop a structural equation model for investment firms to more accurately profile their female investors, considering their personality traits, level of risk tolerance and level of education. Results from this study are in line with previous investment and portfolio management research. Results indicate that male investors are more risk-tolerant than their female counterparts. Furthermore, investors' level of education significantly influenced their level of financial risk tolerance. Personality traits were found to influence female investors financial risk tolerance.
ISSN:2332-2039
2332-2039
DOI:10.1080/23322039.2020.1794493