The effect of personality traits on investment decisions with the mediating role of risk tolerance

Subject Areas : Investments

Arezou  Pouresgandar Raziabad ¹ (Department of Economics, Management and Accounting, University of Tabriz, Tabriz, Iran.)
Alireza  Fazlzadeh ² (Department of Economics, Management and Accounting, University of Tabriz, Tabriz, Iran.)
Vahid  Ahmadian ³ (Department of Economics, Management and Accounting, University of Tabriz, Tabriz, Iran.)
Sajad   Naghdi ⁴ (Department of Economics, Management and Accounting, University of Tabriz, Tabriz, Iran.)

Received: 2024-03-08 Accepted : 2024-05-08 Published : 2024-05-08

Keywords: Behavioral Finance, Investment Decisions, Personality Traits, Risk Tolerance,

Abstract :

Purpose: The aim of this research was to investigate the effect of personality traits on investment decisions with the mediating role of risk tolerance in the Tehran Stock Exchange. Research Methodology: This research was conducted in 2022 and is of an applied nature, employing a descriptive-survey methodology. The statistical population of this research includes all individual investors in the Tehran Stock Exchange. The sample size in this study is 386 individuals. Data collection was carried out using a standard Likert scale questionnaire. The validity of the questionnaire was confirmed through content validity, and its reliability was verified using Cronbach's alpha. Data analysis was performed using Structural Equation Modeling (SEM) with the Partial Least Squares (PLS) approach, facilitated by SPSS and SMARTPLS software. Findings: The results showed that personality traits significantly affect investment decisions and risk tolerance. Furthermore, risk tolerance significantly impacts investment decisions and mediates the relationship between personality traits and investment decisions. Originality / Value: The scientific contribution of this research lies in using risk tolerance as a mediating variable to examine the effect of personality traits on investment decisions. Additionally, the use of structural modeling with the Partial Least Squares approach, aided by SMARTPLS software, is highlighted.

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