Investor Personality Dimensions and Investment Decision Making: Evidence from Individual Investors

Investment decisions are not always guided by financial knowledge and market information alone. Investors may respond differently to the same market situation because of their individual personality, experiences, confidence, and attitudes towards risk. Against this background, the present study examines how four investor personality dimensions Accumulator, Follower, Independent, and Preserver are related to investment decision making among individual investors. A quantitative approach was adopted, and primary data were collected from 200 individual investors through a structured questionnaire. The data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) in SmartPLS. The measurement model was assessed for reliability and validity, while the structural model was examined using path coefficients, R², and bootstrapping with 5,000 resamples.
The findings show that the four personality dimensions collectively account for 40.4% of the variance in investment decision-making. Among the four dimensions, Follower personality had a significant positive relationship with investment decision-making (β = 0.492, t = 8.058, p < 0.001). This shows that investors who tend to follow others may be more influenced by market trends, external recommendations, and the investment choices of people around them. However, Accumulator (β = 0.080, p = 0.341), Independent (β = 0.153, p = 0.059), and Preserver (β = 0.112, p = 0.153) did not show statistically significant relationships with investment decision-making. The findings highlight that personality can be relevant to understanding investor behaviour, although its influence may differ across personality types. The study provides useful insights for individual investors, financial advisors, and investor education programmes by highlighting the importance of recognising personal behavioural tendencies when making investment decisions.

Investor personality, Investment decision making, Investor behaviour, Behavioural finance, PLS-SEM, Individual investors.

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