THE ANTECEDENTS OF INDIVIDUAL INVESTMENT BEHAVIOR: MATERIALISM, RISK AVERSION, POSITIVE AND NEGATIVE AFFECTS

Abstract

Purpose- This study aims to investigate some of the antecedents of individuals’ investment behaviors. In the literature, it is seen studies suggest that some individual factors have a significant effect on investment decisions of individuals. Therefore, materialism, risk aversion, positive and negative affects are considered as predictors of individual investment decisions within the scope of the study.

Methodology- For this purpose, the data which were collected from 169 individuals who work in different industries such as health, automotive, retailing and finance by the survey method were analyzed using the structural equation modeling.

Findings- The results of the study indicate that risk aversion has a positive and significant effect on individuals’ investment decisions. However, materialism, positive and negative affect have no significant effect on individuals’ investment decisions.

Conclusion- On the other hand, it was revealed that individuals’ investment behavior differ according to their monthly income.

Keywords

• Investment behavior
• materialism
• affects
• risk aversion

References

1. Abass, B. M., Dar Fayaz, A. (2013). An empirical study to know the role of emotions in individual investment behavior. ZENITH International Journal of Business Economics & Management Research, Vol.3, No. 2.
2. Al-Tamimi, H., Kalli, A. A. B. (2009). Financial literacy and investment decisions of UAE investors. The Journal of Risk Finance, Vol. 10, No. 5, p. 500-516.
3. Donnelly, G., Iyer, R., Howell, R, T. (2012). The Big Five personality traits, material values, and financial well-being of self-described money managers. J. Econ. Psychol, 33, p.1129–1142.
4. Donnelly, G., Ksendzova, M., Howell, R. T. (2013). Sadness, identity, and plastic in over-shopping: the interplay of materialism, poor credit management, and emotional buying motives in predicting compulsive consumption. J. Econ. Psychol, 39, p.113–125.
5. Geetha, N., Ramesh, M. (2012). A study on relevance of demographic factors in investment decisions. International Journal of Financial Management, Vol.1, No.1, p. 39-56.
6. Górnik-Durose, M. E., Pilch, I. (2016). The dual nature of materialism. How personality shapes materialistic value orientation. Journal of Economic Psychology, 57, p. 102-116.
7. Gunay, S., Demirel, E. (2011). Interaction between demographic and financial behavior factors in terms of investment decision making. International Research Journal of Finance and Economics, 66, p.147-156.
8. Jagongo, A., Mutswenje, V. S. (2014). A survey of the factors influencing investment decisions: the case of individual investors at the NSE. International Journal of Humanities and Social Science, Vol. 4, No. 4, p. 92-102.

9. Hui, C., Tsang, O. (2017). The role of materialism in self-disclosure within close relationships. Personality and Individual Differences, 111, p. 174-177.
10. Islamoğlu, M., Apan, M., Ayvali, A. (2015). Determination of factors affecting individual investor behaviours: a study on bankers. International Journal of Economics and Financial, 5(2), p.531-543.
11. Kaleem, A., Wajid, R. A., Hussain, H. S. (2009). Factors affecting financial advisor’s perception in portfolio management: with reference to Pakistan. Oxford Business and Economics Conference, June 24-26.
12. Kasser, T. (2016). Materialistic values and goals. Annu. Rev. Psychol, 67, p. 489–514.
13. Likitapiwat, T., Sereetrakul, W., Wichadee, S. (2015). Examining materialistic values of university students in Thailand Examine de Los Valores Materialistas de Estudiantes Universitarios en Tailandia. International Journal of Psychological Research, Vol. 8, No.1, p. 109-118.
14. Mak, M. K., Ip, W. (2017). An exploratory study of investment behavior of investors. International Journal of Engineering Business Management, Vol. 9, p.1–12.
15. Mayfield, C., Perdue, G., Wooten, K. (2008). Investment management and personality type. Financial Services Review, 17, p. 219-236.
16. Meydan, C. H., Şeşen, H. (2011). Yapısal eşitlik modellemesi AMOS uygulamaları. Ankara: Detay Yayıncılık.
17. Nofsinger, Richard (2002). Individual investments behaviour. New York, McGraw-Hill.
18. Perera, A. M. (2016). Gender attitudes and investor behaviour: evidence from individual investors in North Western province. Sri Lanka Journal of Economic Research, Vol. 4, No. 1, p. 3-17.
19. Phan, K., Zhou, J. (2014). American journal of business and management. Vol. 3, No. 2, p. 77-94.
20. Sarwar, A., Afaf, G. (2016). A comparison between psychological and economic factors affecting individual investor’s decision making behavior. Cogent Business & Management, 3, p. 1-18.
21. Schermelleh-Engel, K., Moosbrugger, H., Müller, H. (2003). Evaluating the fit of structural equation models: tests of significance and descriptive goodness-of-fit measures. Methods of Psychological Research, 8 (2), 23-74.
22. Shafi, M. (2014). Determinants influencing individual investor behavior in stock market: a cross country research survey. Arabian Journal of Business and Management Review, Vol. 2, No. 1, p. 60-71.
23. Shikuku, O. C. (2014). The effect of behavioral factors on individual investor choices at the Nairobi securities exchange. Degree of Master of Science in Finance in the School of Business, University of Nairobi.
24. Trinh, V. D., Phau, I. (2012). A new set of measurements for the materialism scale. ANZMAC Annual Conference Proceedings. University of South Australia. Australia: 1-7.
25. Watson, D., Clark, L. A., Tellegen, A. (1998). Development and validation of brief measures of positive and negative affect: the PANAS scales. Journal of Personality and Social Psychology, Vol. 54, No. 6, p. 1063-1070.
26. Vijaya, E. (2014). Influential factors on investment behavior of individual investors: a review of empirical evidences from various countries. International Research Journal of Management and Commerce, Vol. 1, No. 5, p. 35-46.