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Personality Traits and Stock Investment of Individuals

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  • Cheng-Po Lai

    (Department of Finance & Graduate Institute of Financial Management, Nanhua University, Chiayi 62249, Taiwan)

Abstract

Behavioral finance has been widely applied in the financial realm from psychological perspectives focusing on herding and disposition effects. However, little research is devoted to the influences of personality traits on the stock investment intentions of individuals. This study extends the theory of planned behavior incorporating the big five personality taxonomies to investigate the effects of the personality traits of individual investors on stock investment intention. Utilizing partial least squares based on structural equation modeling techniques with a sample of 385 subjects, empirical results indicate that the stock investment intentions of individuals are significantly affected by subjective norm, attitude, and perceived behavioral control, and subjective norm significantly affects attitude. Individuals with open and agreeable personalities tend to have influences on subjective norm. Neurotic individuals tend to have negative attitudes toward stock investment. The perceived behavioral control of individuals regarding stock investment is influenced by the personality traits of agreeableness, extroversion, conscientiousness, and openness. Prior stock trading experiences significantly affect the relationships between attitude and stock investment intention, as well as on the linkages between extroversion and subjective norm, attitude, and perceived behavioral control. This study concludes with the discussion of the findings, with insights into theory and managerial implications.

Suggested Citation

  • Cheng-Po Lai, 2019. "Personality Traits and Stock Investment of Individuals," Sustainability, MDPI, vol. 11(19), pages 1-20, October.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5474-:d:273073
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    2. Ma. Janice J. Gumasing & Renée Hannah A. Niro, 2023. "Antecedents of Real Estate Investment Intention among Filipino Millennials and Gen Z: An Extended Theory of Planned Behavior," Sustainability, MDPI, vol. 15(18), pages 1-35, September.
    3. Heena Thanki & Sweety Shah & Harishchandra Singh Rathod & Ankit D. Oza & Dumitru Doru Burduhos-Nergis, 2022. "I Am Ready to Invest in Socially Responsible Investments (SRI) Options Only If the Returns Are Not Compromised: Individual Investors’ Intentions toward SRI," Sustainability, MDPI, vol. 14(18), pages 1-17, September.
    4. Norhazimah Che Hassan & Aisyah Abdul-Rahman & Syajarul Imna Mohd Amin & Siti Ngayesah Ab Hamid, 2023. "Investment Intention and Decision Making: A Systematic Literature Review and Future Research Agenda," Sustainability, MDPI, vol. 15(5), pages 1-22, February.
    5. Yogita Singh & Mohd. Adil & S. M. Imamul Haque, 2023. "Personality traits and behaviour biases: the moderating role of risk-tolerance," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(4), pages 3549-3573, August.
    6. Abu Elnasr E. Sobaih & Ibrahim A. Elshaer, 2022. "Personal Traits and Digital Entrepreneurship: A Mediation Model Using SmartPLS Data Analysis," Mathematics, MDPI, vol. 10(21), pages 1-19, October.
    7. Mirela Panait & Irina Radulescu & Alina Brezoi, 2020. "Financial Markets – Under the Sign of CSR. Some Evidences Regarding Financial Education," Book chapters-LUMEN Proceedings, in: Adriana Grigorescu & Valentin Radu (ed.), 1st International Conference Global Ethics - Key of Sustainability (GEKoS), edition 1, volume 11, chapter 11, pages 96-106, Editura Lumen.
    8. Rahmani, Amir & Mashayekh, Javad & Aboojafari, Roohallah & Bonyadi Naeini, Ali, 2023. "Determinants of households' intention for investment in renewable energy projects," Renewable Energy, Elsevier, vol. 205(C), pages 823-837.

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