Personality Traits and Stock Investment of Individuals

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.