The effects of personality traits on financial behaviour

Abstract

Purpose- The development of financial markets, the complexity of financial products and services, the differences in individual investor profile increase the importance of estimating the financial behaviour of individual investors. The aim of the study is to determine the effects of individual investor's personality traits on their financial behaviors. Methodology- A questionnaire designed to evaluate the personality traits and financial behaviours of individual investors was used. The data set consisted of 1347 individual investors through survey method. We performed multiple linear regression to examine the hypothesized relationships. Findings- According to the statistical results of the research, the dimensions of personality traits such as conscientiousness, agreeableness and openness to experience have positive and significant effects on financial behaviour. But extraversion and neuroticism have not significant effects on financial behaviour. Conclusion- The results of the study emphasize the importance of personality characteristics in explaining financial behaviours. Personality traits are important factors that financial institutions should focus on when offering products and services related to individual investor portfolios.