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Big-five personality traits, financial risk attitude and investment intentions: study on Generation Y

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  • Tanuj Nandan
  • Kumar Saurabh

Abstract

Individuals take investment decisions based on risk, return and time horizon of the investment. Personality types of individuals affect their attitude towards financial risk and in turn their investment intentions. The present study examines the empirical relationship between personality traits and investment intentions, mediated by attitude towards financial risk. The study utilises a sample of 313 Generation Y students from a technical institution of Allahabad, India. Our results show that the neuroticism, extraversion and openness to experience dimensions have perfect mediated relationship with short term investment intentions, mediated by attitude towards financial risk. Agreeableness has been found to exert a partial mediated relationship with short term investment intentions, while the conscientiousness dimension of personality type has not been found to be a significant predictor of short term investment intentions. Similarly, agreeableness has not been found to predict the long term investment intentions of individuals.

Suggested Citation

  • Tanuj Nandan & Kumar Saurabh, 2016. "Big-five personality traits, financial risk attitude and investment intentions: study on Generation Y," International Journal of Business Forecasting and Marketing Intelligence, Inderscience Enterprises Ltd, vol. 2(2), pages 128-150.
    • Handle: RePEc:ids:ijbfmi:v:2:y:2016:i:2:p:128-150
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    1. Arvindh Rajasekar & Arul Ramanatha Pillai & Rajesh Elangovan & Satyanarayana Parayitam, 2023. "Risk capacity and investment priority as moderators in the relationship between big-five personality factors and investment behavior: a conditional moderated moderated-mediation model," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(3), pages 2091-2123, June.
    2. 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.
    3. Karthikeyan Shanmugam & Vijayabanu Chidambaram & Satyanarayana Parayitam, 2023. "Relationship Between Big-Five Personality Traits, Financial Literacy and Risk Propensity: Evidence from India," IIM Kozhikode Society & Management Review, , vol. 12(1), pages 85-101, January.
    4. Muñoz-Muñoz, E. & Crespo-Cebada, E. & Mirón-Sanguino, A.S. & Díaz-Caro, C., 2025. "Investors personality correlates with sustainability preferences in investment – A choice experiment with Spanish investors," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 114(C).
    5. Muhammad Nauman Sadiq, Raja Ased Azad Khan, 2019. "Impact of Personality Traits on Investment Intention: The Mediating Role of Risk Behaviour and the Moderating Role of Financial Literacy," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 4(1), pages 1-18, March.

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