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Factors Influencing Individuals Short-term Investment Intentions

Author

Listed:
  • Sune Ferreira-Schenk

    (North-West University, South Africa)

  • Zandri Dickason-Koekemoer

    (North-West University, South Africa)

  • Naveed Hussain Shah

    (University of Swabi, Swabi, Pakistan)

Abstract

This article aimed to determine what drives investors short-term intention to invest following a more sociological and behavioural approach by including investor personality traits, behavioural finance biases these investors could be subject towards, and their risk tolerance behaviour. Based on the complexity of the variables a multivariate statistical approach was preferred. Therefore, a structural equation model (SEM) was employed and proved to be a good model for the data. Secondary data was obtained from a pre-collected survey by a private investment firm for research purposes. The results indicated that investors who have strong extraversion, agreeableness and openness to experience personality traits will be more likely to invest in short-term investment portfolios. From the nine behavioural finance biases, one bias significantly explained investors short-term investment intentions. Investors who are overconfident in their investment skills tend to invest more in the short-term. It is therefore recommended to portfolio management companies that several sociological and behavioural variables do explain whether investors will be willing to invest in short-term or more long-term investment portfolios.

Suggested Citation

  • Sune Ferreira-Schenk & Zandri Dickason-Koekemoer & Naveed Hussain Shah, 2021. "Factors Influencing Individuals Short-term Investment Intentions," International Journal of Economics and Financial Issues, Econjournals, vol. 11(4), pages 73-81.
  • Handle: RePEc:eco:journ1:2021-04-9
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    References listed on IDEAS

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    Cited by:

    1. Evodia Mankuroane & Wilme van Heerden & Sune Ferreira-Schenk & Zandri Dickason-Koekemoer, 2022. "Psychological and Behavioural Drivers of Short-Term Investment Intentions," International Journal of Economics and Financial Issues, Econjournals, vol. 12(4), pages 19-27, July.

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    More about this item

    Keywords

    risk tolerance; behavioural finance biases; personality traits; short-term investment;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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