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Understanding the influence of investors' risk perception on investment decision-making in South Africa’s financial markets

Author

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  • Bosede Olatomi Ige

    (DUT)

  • Stanley Chibuzor Onwubu

    (Durban University of Technology)

Abstract

This study investigates the factors influencing investment decision-making within South Africa's financial markets, focusing on psychological, demographic, and external market elements. Drawing from Prospect Theory, the research reveals a deviation from traditional behavioral assumptions, highlighting that external market dynamics, rather than individual risk perceptions or demographic traits, predominantly guide investor behavior. Using a quantitative cross-sectional design, data were collected through structured questionnaires from 120 randomly selected South African investors aged 18 and older with market experience. Structural equation modelling assessed factors influencing risk perception and subsequently, investment behavior. The findings demonstrate that market-related variables significantly influence risk perception (? = 0.653, p

Suggested Citation

  • Bosede Olatomi Ige & Stanley Chibuzor Onwubu, 2025. "Understanding the influence of investors' risk perception on investment decision-making in South Africa’s financial markets," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 14(6), pages 108-120, August.
    • Handle: RePEc:rbs:ijbrss:v:14:y:2025:i:6:p:108-120
    DOI: 10.20525/ijrbs.v14i6.4187
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