Risk Aversion and Investment Intentions of Filipino Investors

A Moderation Study

Authors

  • John Mark Distor Polytechnic University of the Philippines
  • Alfonce Martin Sanchez Far Eastern University
  • Jubeth Magturo Far Eastern University
  • Crystal Corales Far Eastern University
  • John Jasper Laxamana Far Eastern University

DOI:

https://doi.org/10.48017/dj.v8i3.2676

Keywords:

Investment, risk aversion, stock market, cryptocurrency

Abstract

A survey was conducted amongst a sample of Filipino retail investors residing in NCR. All at the ages of 21-60 with at least 1 year of investing experience in the Philippine stock market and cryptocurrency market. Risk Aversion, Long Term Investment Intention (LTII), and Short Term Investment Intention (STII) are the variables that were measured using Risk Aversion Scale and Investment Intentions Scale and moderation analysis of the setting of stocks and cryptocurrency was done. The study showed significant correlation of Risk Aversion and STII in the setting of cryptocurrency. The data manifested significant moderation in Risk Aversion and LTII in the setting of stock investing and Risk Aversion and STII in the setting of cryptocurrency investing.

Metrics

Metrics Loading ...

Author Biographies

John Mark Distor, Polytechnic University of the Philippines

Linked to the Polytechnic University of the Philippines.

Alfonce Martin Sanchez, Far Eastern University

Linked to the Far Eastern University, Philippines.

Jubeth Magturo, Far Eastern University

Linked to the Far Eastern University, Philippines.

Crystal Corales, Far Eastern University

Linked to the Far Eastern University, Philippines.

John Jasper Laxamana, Far Eastern University

Linked to the Far Eastern University, Philippines.

References

Almazan, F. (2021). Stock market accounts up 13.7% in 2020. The Manila Times. https://www.manilatimes.net/2021/06/03/business/top-business/stock-market-accounts-up-137-in-2020/1801769

Aren, S. and Nayman, H. H. (2020), "Relationship between risk aversion, risky investment intention, investment choices: Impact of personality traits and emotion", Kybernetes, Vol. 49 No. 11, pp. 2651-2682. https://doi.org/10.1108/K-07-2019-0455

Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-t

Barber, B. M., & Odean, T. (2001). Boys will be Boys: Gender, Overconfidence, and Common Stock Investment. The Quarterly Journal of Economics, 116(1), 261–292. https://doi.org/10.1162/003355301556400

Bolton, L., Cohen, J., & Bloom, P. (2006). Does Marketing Products as Remedies Create “Get Out of Jail Free Cards”? Journal of Consumer Research, 33(1), 71–81. https://doi.org/10.1086/504137

Cabuag, V. G. (2021). PSE: Online stock market accounts up 20% in 2020 | VG Cabuag.BusinessMirror.https://businessmirror.com.ph/2021/06/03/pse-online-stock-market-accounts-up-20-in-2020/

Cahanap, S. M., & Tan, J. B. (2020). Identified factors influencing investment decisions and risky financial behavior among certified public accountants. Professional Schools, University of Mindanao, Davao City, Philippines DOI: https://doi.org/10.53899/spjrd.v27i1.172

Clor-Proell, S. M., Guggenmos, R. D., & Rennekamp, K. (2019). Mobile Devices and Investment News Apps: The Effects of Information Release, Push Notification, and the Fear of Missing Out. The Accounting Review, 95(5), 95–115. https://doi.org/10.2308/accr-52625

Cagan, M. (2016). Stock Market 101: From Bull and Bear Markets to Dividends, Shares, and Margins―Your Essential Guide to the Stock Market (Adams 101). Adams Media.

Chandra, A. (2008). Decision Making in the Stock Market: Incorporating Psychology with Finance. SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1501721

Costa, P. T., & McCrae, R. R. (1992). Normal personality assessment in clinical practice: The NEO Personality Inventory. Psychological Assessment, 4, 5–13.

Costa, P. T., & McCrae, R. R. (2003). NEO-FFI: NEO Five Factor Inventory. Lutz, FL: Psychological Assessment Resources, Inc.

Crosby, D. D., & Housel, M. (2021). The Laws of Wealth: Psychology and the secret to investing success. Harriman House.

Cueva, C., Iturbe-Ormaetxe, I., Ponti, G., & Tomás, J. (2019). Boys will still be boys: Gender differences in trading activity are not due to differences in (over) confidence. Journal of Economic Behavior & Organization, 160, 100-120. https://doi.org/10.1016/j.jebo.2019.02.027

Deci, E. L., & Ryan, R. M. (2013). Intrinsic motivation and self-determination in human behavior. Springer Science & Business Media.

Delfabbro, P., King, D. L., & Williams, J. (2021). The psychology of cryptocurrency trading: Risk and protective factors. Journal of Behavioral Addictions, 10(2), 201–207. https://doi.org/10.1556/2006.2021.00037

Filbeck, G., Hatfield, P., & Horvath, P. (2005). Risk Aversion and Personality Type. Journal of Behavioral Finance, 6(4), 170–180. https://doi.org/10.1207/s15427579jpfm0604_1

Gambetti, E., & Giusberti, F. (2019). Personality, decision-making styles and investments. Journal of Behavioral and Experimental Economics, 80, 14–24. https://doi.org/10.1016/j.socec.2019.03.002

Gomez-Mejia, I. R., & Balkin, D. (1989). Effectiveness and aggregate compensation strategies. Industrial Relations, 28, 431– 445.

Hayes, A. (2021). Retail Investor: Definition, What They Do, and Market Impact. Investopedia. https://www.investopedia.com/terms/r/retailinvestor.asp

Hessing, D. J., Elffers, H., & Weigel, R. H. (1988). Exploring the limits of self-reports and reasoned action: An investigation of the psychology of tax evasion behavior. Journal of Personality and Social Psychology, 54(3), 405–413. https://doi.org/10.1037/0022-3514.54.3.405

John, O. P., & Srivastava, S. (1999). The Big-Five trait taxonomy: History, measurement, and theoretical perspectives. In L. A. Pervin & O. P. John (Eds.), Handbook of personality: Theory and research (Vol. 2, pp. 102–138). New York: Guilford Press.

Kahneman, D. (2013). Thinking, Fast and Slow (1st ed.). Farrar, Straus and Giroux.

Kourtidis, D., Šević, E., & Chatzoglou, P. (2011). Investors’ trading activity: A behavioural perspective and empirical results. The Journal of Socio-Economics, 40(5), 548–557. https://doi.org/10.1016/j.socec.2011.04.008

Larsson, E., & Johansson, L. (2022). Investing in Bitcoin and Ethereum during stock market turmoil-a Swedish Perspective.: A study on the hedging, safe-haven, and diversification characteristics of Bitcoin, Ethereum and Gold against the OMX30 during the COVID-19 crisis and Russian invasion of Ukraine.

Lathif, A. S. (2019). The impact of investor's personality types on investment intentions. Journal of Composition Theory, 7(15), 1078-1088.

Mayfield, C., Perdue, G., & Wooten, K. (2008). Investment management and personality type. Financial services review, 17(3), 219-236.

Nandan, T., & Saurabh, K. (2016). Big-five personality traits, financial risk attitude and investment intentions: study on Generation Y. International Journal of Business Forecasting and Marketing Intelligence, 2(2), 128. https://doi.org/10.1504/ijbfmi.2016.078154

Przybylski, A. K., Murayama, K., DeHaan, C. R., & Gladwell, V. (2013). Motivational, emotional, and behavioral correlates of fear of missing out. Computers in Human Behavior, 29(4), 1841–1848. https://doi.org/10.1016/j.chb.2013.02.014

Rivas, R. (2022). What you need to know before trading stocks on GCash. RAPPLER. https://www.rappler.com/business/things-to-know-before-trading-stocks-gcash/

Royandoyan, R. (2021). Retail investors dominate PSE as lingering pandemic reshapesstockmarket.Philstar.Com.https://www.philstar.com/business/2021/06/02/2102598/retail-investors-dominate-pse-lingering-pandemic-reshapes-stock-market

Sadiq, M. N., & Khan, R. A. A. (2019). Impact of personality traits on investment intention: the mediating role of risk behaviour and the moderating role of financial literacy. Journal of Finance & Economics Research, 4(1), 1-18. https://doi.org/10.20547/jfer1904101

Shafi, M. (2014). Determinants influencing individual investor behavior in stock market: a cross country research survey. Nigerian Chapter of Arabian Journal of Business and Management Review, 62(1100), 1-12.

Shiva, A., Narula, S., & Shahi, S. K. (2020). What drives retail investors‟ investment decisions? Evidence from no mobile phone phobia (Nomophobia) and investor fear of missing out (I-FoMo). Journal of Content, Community and Communication, 10(6), 2-20.

Tversky, A., & Kahneman, D. (1974). Judgment under Uncertainty: Heuristics and Biases: Biases in judgments reveal some heuristics of thinking under uncertainty. science, 185(4157), 1124-1131.

Vega, N. (2021, August 24). Behavioral finance expert: “FOMO investing” will “really derail an investor.” CNBC. https://www.cnbc.com/2021/08/24/avoid-fomo-while-investing.html

Downloads

Published

2023-07-03

How to Cite

Distor, J. M., Sanchez, A. M., Magturo, J., Corales, C., & Laxamana, J. J. (2023). Risk Aversion and Investment Intentions of Filipino Investors: A Moderation Study. Diversitas Journal, 8(3), 2748–2761. https://doi.org/10.48017/dj.v8i3.2676