Investors Personality Traits and Mutual Fund Investment Decisions: A Regression Analysis of Risk Tolerance and Investment Choices

Abstract

This research examines the factors influencing High-Risk Fund Investment (HRFI) and Low-Risk Fund Investment (LRFI) among individual investors. Through regression analysis on a comprehensive dataset, the study reveals significant relationships between various psychological, educational, and demographic factors and investment behaviour. The findings highlight the importance of age and investment knowledge in promoting risk-taking tendencies, while conservative traits and risk perception significantly impact low-risk investment choices. The robust R-squared values obtained from the regression models indicate a strong predictive capability of the analysed factors on investment decisions. This research provides essential insights for financial advisors and policymakers to enhance investor education and encourage informed decision-making. Future studies should explore additional variables and adopt longitudinal approaches to gain a deeper understanding of evolving investment behaviors in a dynamic financial landscape.