Do Personality Traits And Gender Of Investors Determine Their Risk Tolerance? A Study On Investors Of Indonesian
Keywords:
Openess to experience, Conscientiousness, Extraversion, Agreeableness, Neuroticism, Gender, and risk ToleranceAbstract
Abstract
Research aims: To examine the influence of personality traits consisting of openness to experience, conscientiousness, extraversion, greeableness, neuriticism on financial risk tolerance of investors in Indonesia. In addition, this study also aims to examine the influence of gender on financial risk tolerance.
Design/Methodology/Approach: The pre-tested questionnaire was used to collect information from 434 respondents. With risk tolerance as the dependent variable with two categories, namely low and high, and five personality traits as independent variables tested by regression. for testing gender on risk tolerance using probit logistic regression.
Research findings: The results of research obtained from 434 investors in Indonesia who filled out an online questionnaire, showed that the higher an investor's openness to experience personality, the higher the investor's opportunity to be tolerant of risk, and the higher an investor's neuriticism personality, the lower the investor's opportunity to be tolerant of risk. This research also found that men proved to be more tolerant of risk than women.
Theoretical Contribution/Originality: This study is evidence that investors are also human beings who cannot be completely rational and need to be approached behaviorally and psychologically to enrich the results of research and theory development in the field of finance. In addition, this study also provides evidence that the level of risk tolerance between men and women is also different.
Practical/Policy/Social Implications: The results of this study can help wealth managers in determining risk parameters to formulating investment recommendations that are appropriate and they like based on each person's personality traits, and can help the IDX, the Government, and other related parties to continue to improve educational programs for the Indonesian people, especially for women, so that it can reduce the level of fear of the community in investing in the capital market.
Research Limitations/Implications:
This study has several limitations, namely this study only tests the direct influence of personality traits and gender on risk tolerance. because the number of male and female respondents obtained is very different so that researchers only test the influence of gender between men and women on risk tolerance. It is hoped that further research can examine gender by conducting a split sample to see the difference in the influence of personality traits between men and women on risk tolerance.
Keywords: Openess to experience, Conscientiousness, Extraversion, Agreeableness, Neuroticism, Gender, and risk Tolerance
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