Abstract
Each investor has an investment plan to reach their investment objectives. Perceived investment performance was affected by a high level of the psychological aspect. The purpose of this study was to test the effect of the Big Five personality traits on the perception of investment performance. This study also tests the moderating role of social interaction. PLS-SEM was used to test the hypotheses. Used individual stock investors in Indonesia, the findings showed that openness personality had a negative effect on perceived investment performance. Otherwise, conscientiousness, extraversion, agreeableness, and neuroticism had a positive impact on perceived investment performance. The results also show that social interaction moderates the relationship between conscientiousness, agreeableness, and perceived investment performance. This result shows that information selection and investment knowledge is important when allocating asset to achieve investment objectives.
Highlights
The Indonesian capital market is one of the capital markets that is currently developing
In the behavioral finance literature, some researchers have modeled the trading behavior of investors based on insights from personality psychology
This study aims to test the role of personality traits on perceived investment performance
Summary
The Indonesian capital market is one of the capital markets that is currently developing. Investment activities in Indonesia's capital market have increased. Based on KSEI data, from 2018 to 2019, total Single Investor Identification (SID) increased by 53.04% to 2,478,243 SID. To get optimal investment returns, investors need to have an investment plan as well as good analytical skills and strategies (Kubilay and Bayrakdaroglu, 2016). Besides successful investment requires control of psychology by 60% (Tharp, 2008). In the behavioral finance literature, some researchers have modeled the trading behavior of investors based on insights from personality psychology. The role of the investor's personality has not been considered more broadly (Akhtar, Thyagaraj and Das, 2018a). By understanding this aspect, investors can manage the potential and investment risks to get good investment performance.
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