Exploring the Interplay between Personality Traits, Gender Disparities, and Investment Decision-making: A Comprehensive Review

Description

Page: 139-145

Diksha and Mohit Gupta (School of Business Studies, Punjab Agricultural University, Ludhiana, Punjab)

Investment decision-making is an important aspect of financial planning, influenced by a variety of psychological, demographic, and behavioural factors. This review paper examines the interplay between personality traits, gender disparities, and financial decision-making. It emphasizes how the Big Five Personality Traits-Extraversion, Agreeableness, Conscientiousness, Neuroticism, and Openness to Experience-influence investor behaviour. It also incorporates behavioural finance findings to address the psychological and emotional drivers of investment decisions, highlighting how biases like overconfidence and risk aversion influence decision-making processes. Furthermore, gender differences in these traits are investigated, revealing distinct patterns in risk tolerance, financial literacy, and decision-making styles. Women, for example, tend to be more conscientious and neurotic, resulting in more cautious and diligent investment decisions, whereas men are more open and extraverted, leading to a preference for higher-risk investments. It further suggests that future research should consider the impact of cultural contexts on investment decision-making. By offering a deeper understanding of these psychological and demographic aspects, this review attempts to enhance the personalization of financial advice and improve investment outcomes.