Abstract
Investment decisions are usually being complicated by emotional process, mental mistakes and individual personality traits. In almost every important economic decision, the concept of risk in one hand, and uncertainty on the other hand, play a major function. Consequently, the objective of having an understanding and at the same time predicting the behaviour of an economy is intimately linked to understanding individual attitudes towards risk. behavioural finance happens to be a contemporary field that tends to merge the theory of behavioural cognitive psychology with conventional economics and finance with a view to giving reasons on why individuals made financial decisions that are irrational. The focus of behavioural finance is to study the final decision-making process and risk judgement of investors taking into consideration the theories and concepts that influences them. During investment decision making, the behaviour of an investor is affected by several factors. One of such decision influencing factors among others is demographic profile of investors. Different attitudes towards decision making were exhibited by respondents with diverse occupation, marital status, family size, income level, age and gender. They were also grouped into adverse risk and risk seeker.
Highlights
In the present modern-day world of numerous financial crisis and economic turbulence, advisors and researchers are taking interest in human sentiments and emotions before investing money
Behavioural finance happens to be a contemporary field that tends to merge the theory of behavioural cognitive psychology with conventional economics and finance with a view to giving reasons on why individuals made financial decisions that are irrational
- To establish a comprehensive review through literature appraisal on the subject of financial risk tolerance/aversion affected by demographic profiles (Education, Age, Occupation, Gender, Income level, Marital status, Family size, Race and Religion)
Summary
In the present modern-day world of numerous financial crisis and economic turbulence, advisors and researchers are taking interest in human sentiments and emotions before investing money. Heuristics, cognitive factors, and affective (emotional) issues are factors that influences financial judgements made by individuals This is the perspective of the behavioural finance literature. The focus of behavioural finance is to study the final decision-making process and risk judgement of investors taking into consideration the theories and concepts that influences them. This includes factors referred to as mental mistakes (errors) or cognitive bias (Ricciard, 2008). - To establish a comprehensive review through literature appraisal on the subject of financial risk tolerance/aversion affected by demographic profiles (Education, Age, Occupation, Gender, Income level, Marital status, Family size, Race and Religion)
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