Influence of personality traits on financial risk tolerance among Nepalese investors from Nepal stock exchange

Abstract

The study investigate a connection between five personality traits (Extroversion, Openness, Agreeableness, Conscientiousness, and Neuroticism) and Financial Risk Tolerance (FRT) of Nepalese investors. Through descriptive and causal-comparative study, the study discovers that all the traits are positive effects on FRT. The most significant influence is that of neuroticism whereby emotionally unstable people are more risk takers. It is also related to conscientiousness since responsible investors are prone to making calculated risks. The Extroversion and Agreeableness traits promote risk-taking by engaging in social activities and dealing with uncertainty whereas Openness has a smaller and positive effect. These findings emphasize the importance of personality in financial choices and indicate that investment planning needs to adjust to individuals to enhance its outcomes.