Are the Effects of Age Still Relevant in Predicting Malaysian Investors’ Risk-Taking Behavior in Stock Market?

  • Authors

    • Audrey Lim Li Chin
    • Arfan Shahzad
    2018-08-08
    https://doi.org/10.14419/ijet.v7i3.21.17166
  • Age, Risk-Taking, Herding, Conservatism, Familiarity Bias, Regret, Self-Confidence Bias

  • Abstract

    The role of age in moderating investor’s self-confidence bias, herding, conservatism bias, familiarity bias, and regret in risk-taking behavior is explored using data collected from retail investors in Melaka, Selangor, and Wilayah Persekutuan (W.P.) Kuala Lumpur. As indicated in data analysis by Partial Least Squares Structural Equation Modelling (PLS-SEM), age plays an important moderating role in herding, regret, and self-confidence bias in investor’s risk-taking behavior. While younger investors who tend to herd are more risk averse and feel more regret in risk-taking than the older group, older investors seem to exhibit a higher level of self-confidence bias than younger investors. However, the risk- taking distribution between the age groups indicates no significant difference. Thus, the readiness in greater levels of risk acceptance depends on the individuals’ preference towards herding, regret, and self-confidence bias. Furthermore, this study also address contradictions in the existing literatures that fuels stereotyping and discrimination based on age. Therefore, age stereotype should be avoided when formulating microstructure strategies to raise the investor’s participation in the stock market.

     

     

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  • How to Cite

    Lim Li Chin, A., & Shahzad, A. (2018). Are the Effects of Age Still Relevant in Predicting Malaysian Investors’ Risk-Taking Behavior in Stock Market?. International Journal of Engineering & Technology, 7(3.21), 238-242. https://doi.org/10.14419/ijet.v7i3.21.17166

    Received date: 2018-08-08

    Accepted date: 2018-08-08

    Published date: 2018-08-08