Interplay Among Personality Traits and Investment Decision Making With Mediating: Role of Financial Risk Tolerance

Abstract

The drivers of risk preference have been studied in this study in respect to potential modifiers. Conscientiousness, openness, neuroticism, and agreeableness are the "big five" personality characteristics. Investor experience, investment time, interest, motive, emotions, self-discipline, economic management and implementation, financial position, and risk preference are all elements that influence the decision to take a risk with an investment. Personality qualities are categorized using the Big Five taxonomy, which includes extraversion, agreeableness, conscientiousness, neuroticism, and openness to experience. The primary data was supplied by 300 stock market consumers from Islamabad, Lahore, and Faislabad. The dependability of the dataset was tested employing SPSS, and the results were analyzed. Pathway analysis was used to examine the accuracy of the constructs. Following the results of the moderated mediation, risk tolerance was shown to have partially mediated the relationship between psychological factors and investment inclinations. A sample size of 300 investors who trade on the Pakistan Stock Market was used to conduct research using a questionnaire. Using Hayes' (2013) PROCESS macro in SPSS, a mediation study was conducted out. Extroversion, openness to new experiences, investment decision-making, and fiscal risk tolerance were all factors that were examined during this research. The latest findings supported the idea that extroversion, openness to new experiences, investment choice, and socioeconomic risk tolerance are all positively correlated. The results of bootstrapping also indicated the mediating significance of financial risk tolerance in the relationship between conscientiousness, neuroticism, and financing decisions.