Investors’ financial risk tolerance is crucial in the formulation of suitable financial advice; in the past, assessment efforts relied on multiple approaches and techniques, but their consistency is still an issue. The authors focus on 2 metrics traditionally proposed (self-assessment and portfolio composition) and test their mutual consistency on a sample of 2,374 investors. The approach allows them to discriminate between inconsistencies due to wrong portfolio compositions and those arising from wrong self-assessments. The authors show that low financial literacy, high income, no children, and incautious economic behavior are commonly associated with such inconsistencies.

Mind the gap: inconsistencies between subjective and objective financial risk tolerance / Mazzoli, Camilla; Palmucci, Fabrizio; Marinelli, Nicoletta. - In: JOURNAL OF BEHAVIORAL FINANCE. - ISSN 1542-7560. - 18:2(2017), pp. 219-230. [10.1080/15427560.2017.1308944]

Mind the gap: inconsistencies between subjective and objective financial risk tolerance

MAZZOLI, Camilla;
2017-01-01

Abstract

Investors’ financial risk tolerance is crucial in the formulation of suitable financial advice; in the past, assessment efforts relied on multiple approaches and techniques, but their consistency is still an issue. The authors focus on 2 metrics traditionally proposed (self-assessment and portfolio composition) and test their mutual consistency on a sample of 2,374 investors. The approach allows them to discriminate between inconsistencies due to wrong portfolio compositions and those arising from wrong self-assessments. The authors show that low financial literacy, high income, no children, and incautious economic behavior are commonly associated with such inconsistencies.
2017
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11566/227854
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