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Predictors of investment in risky assets among Malaysian families

Investment, as a strategy to enhance financial well-being, is exposed to high expected risk in order to gain high expected returns. This study focused on the effects of personality and behavioural factors in predicting investments in risky assets. The personality factors studied were future time ori...

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Main Authors: Abdul Rahim@Abdul Wahab, Husniyah, Md Jusoh, Zuroni, Abdul Samad, M. Fazilah
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2012
Online Access:http://psasir.upm.edu.my/id/eprint/17661/1/Predictors%20of%20investment%20in%20risky%20assets%20among%20Malaysian%20families.pdf
http://psasir.upm.edu.my/id/eprint/17661/
http://www.ukm.my/fep/jem/content/2012.html
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spelling my.upm.eprints.176612016-02-02T03:59:53Z http://psasir.upm.edu.my/id/eprint/17661/ Predictors of investment in risky assets among Malaysian families Abdul Rahim@Abdul Wahab, Husniyah Md Jusoh, Zuroni Abdul Samad, M. Fazilah Investment, as a strategy to enhance financial well-being, is exposed to high expected risk in order to gain high expected returns. This study focused on the effects of personality and behavioural factors in predicting investments in risky assets. The personality factors studied were future time orientation, financial risk tolerance and self-worth, whilst the behavioural factors concerned were the dimensions of financial management practices of families. Quota sampling based on ethnicity was used to sample a total of 800 respondents, namely the reported family financial managers from families residing in Peninsular Malaysia. Investment in risky assets was based on the self-reported investment in stocks. Binary logistic regression analysis revealed financial risk tolerance, self-worth, record-keeping, credit, savings and risk management as significant predictors of investment in risky assets. Family financial managers who were more risk-tolerant with higher self-worth tend to invest in risky assets. Furthermore, those who perform record-keeping; regularly save; and managing risk well were also more likely to invest in risky assets. However, those managing credit wisely were less likely to invest in risky assets. The most influential factors for predicting investment in risky assets found in this study were savings, followed by self-worth, risk practices, record-keeping and financial risk tolerance. The findings provided evidence that specific personality factors and financial management practices did predict investment in risky assets. Knowing these factors will enable financial planners to identify those with potential to invest in this type of asset and encourage them to invest in risky assets in order to gain greater return from their investment. As for those families having such personality and performing influential financial practices, they would realise their capability in risky investment. However, for those having low self-worth, less tolerating with financial risk and hardly did those influential financial practices, they could be trained to make them capable to invest in risky assets. More families would have the potential to invest in risky assets that can lead to financial stability in the long run. Additionally, this will contribute to the economic growth of the country. Penerbit Universiti Kebangsaan Malaysia 2012 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/17661/1/Predictors%20of%20investment%20in%20risky%20assets%20among%20Malaysian%20families.pdf Abdul Rahim@Abdul Wahab, Husniyah and Md Jusoh, Zuroni and Abdul Samad, M. Fazilah (2012) Predictors of investment in risky assets among Malaysian families. Jurnal Ekonomi Malaysia, 46 (1). pp. 27-37. ISSN 0126-1962 http://www.ukm.my/fep/jem/content/2012.html
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Investment, as a strategy to enhance financial well-being, is exposed to high expected risk in order to gain high expected returns. This study focused on the effects of personality and behavioural factors in predicting investments in risky assets. The personality factors studied were future time orientation, financial risk tolerance and self-worth, whilst the behavioural factors concerned were the dimensions of financial management practices of families. Quota sampling based on ethnicity was used to sample a total of 800 respondents, namely the reported family financial managers from families residing in Peninsular Malaysia. Investment in risky assets was based on the self-reported investment in stocks. Binary logistic regression analysis revealed financial risk tolerance, self-worth, record-keeping, credit, savings and risk management as significant predictors of investment in risky assets. Family financial managers who were more risk-tolerant with higher self-worth tend to invest in risky assets. Furthermore, those who perform record-keeping; regularly save; and managing risk well were also more likely to invest in risky assets. However, those managing credit wisely were less likely to invest in risky assets. The most influential factors for predicting investment in risky assets found in this study were savings, followed by self-worth, risk practices, record-keeping and financial risk tolerance. The findings provided evidence that specific personality factors and financial management practices did predict investment in risky assets. Knowing these factors will enable financial planners to identify those with potential to invest in this type of asset and encourage them to invest in risky assets in order to gain greater return from their investment. As for those families having such personality and performing influential financial practices, they would realise their capability in risky investment. However, for those having low self-worth, less tolerating with financial risk and hardly did those influential financial practices, they could be trained to make them capable to invest in risky assets. More families would have the potential to invest in risky assets that can lead to financial stability in the long run. Additionally, this will contribute to the economic growth of the country.
format Article
author Abdul Rahim@Abdul Wahab, Husniyah
Md Jusoh, Zuroni
Abdul Samad, M. Fazilah
spellingShingle Abdul Rahim@Abdul Wahab, Husniyah
Md Jusoh, Zuroni
Abdul Samad, M. Fazilah
Predictors of investment in risky assets among Malaysian families
author_facet Abdul Rahim@Abdul Wahab, Husniyah
Md Jusoh, Zuroni
Abdul Samad, M. Fazilah
author_sort Abdul Rahim@Abdul Wahab, Husniyah
title Predictors of investment in risky assets among Malaysian families
title_short Predictors of investment in risky assets among Malaysian families
title_full Predictors of investment in risky assets among Malaysian families
title_fullStr Predictors of investment in risky assets among Malaysian families
title_full_unstemmed Predictors of investment in risky assets among Malaysian families
title_sort predictors of investment in risky assets among malaysian families
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2012
url http://psasir.upm.edu.my/id/eprint/17661/1/Predictors%20of%20investment%20in%20risky%20assets%20among%20Malaysian%20families.pdf
http://psasir.upm.edu.my/id/eprint/17661/
http://www.ukm.my/fep/jem/content/2012.html
_version_ 1643826586362839040
score 13.211869

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