What is it about?
The paper establishes a relationship between the level of risk tolerance that investors have, the personality they have (introvert, extrovert), and the behavioural finance biases that they might be subject towards.
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Why is it important?
The paper establishes a relationship between the level of risk tolerance that investors have, the personality they have (introvert, extrovert), and the behavioural finance biases that they might be subject towards. By establishing this relationship, investment companies can more accurately profile their investors. A more accurate profile will result in more suitable investment options available for investors.
Perspectives
In practice, investors are not rational when making investment decisions and these investment decisions are often affected by psychological factors that cannot be measured effectively in the market. Therefore, research in this area is important in order to identify these factors.
Sune Ferreira
North-West University
Read the Original
This page is a summary of: Establishing a link between risk tolerance, investor personality and behavioural finance in South Africa, Cogent Economics & Finance, September 2018, Taylor & Francis,
DOI: 10.1080/23322039.2018.1519898.
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