Financial risk tolerance: An analysis of unexplored factors

Publisher:
Academy of Financial Services
Publication Type:
Journal Article
Citation:
Financial Services Review, 2013, 22 (1), pp. 23 - 50
Issue Date:
2013-01
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Using data from a survey alliance between Kiplinger's Personal Finance Magazine, PBS's Nightly Business Report, and FinaMetrica, this study explores various demographical and attitudinal factors related to financial risk tolerance. Investigating risk tolerance scores of more than 2,000 individuals immediately after the 2008 Global Financial Crisis, we find a positive relationship between risk tolerance and income, investment knowledge and positive stock market expectations. Risk tolerance is found to be lower for females, older individuals, those that currently use a financial advisor and individuals that perceive the stock market to be riskier than two years before.
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