Influence of Big Five Personality Traits on the Investment Decisions of Investors-Empirical Approach

Financial planning is essential for managing rising living costs and achieving the desired standard of living. Investments thus play an important role in a person’s life. People base their investment decisions on their suitability, risk tolerance, and expected return. Consumers, on the other hand, do not always make logical financial decisions. The current study attempted to investigate how consumer sociodemographic characteristics influence variation in the Big Five personality traits (neuroticism, extraversion, agreeableness, conscientiousness, and openness to experience). The current study collected data from Chennai investors through a survey using a five-point Likert scale. The purpose of this study is to examine the behavioural aspects of investors by identifying personality traits and building a model to determine the level of impact of the mentioned parameters. The dynamic nature of individuals necessarily requires an assessment of how psychological factors impact decision-making. The model fit was evaluated using reliability and validity tools. A person may not be classified solely by one personality trait. An attempt was made to quantify the influence of various personality traits on investment decisions. This finding’s implications and recommendations are discussed. The study investigates the impact of financial literacy on investment decisions, as well as the mediating effect of personality traits based on the big-five model. The study contributes to a better understanding of investor behaviour by examining the role of the big five personality traits in mediating the relationship between financial literacy and investment decisions.