Sheraton Uptown, Albuquerque, NM, USA
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Saturday, April 22 • 10:30am - 12:00pm
A1B-Measurement of Affect in Financial Risk Tolerance and its Association with Portfolio Risk

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The purpose of this study was to determine the degree to which affect (i.e. feelings) was associated with an investor’s portfolio. The Risk-as-Feelings (RaF) hypothesis was utilized to guide the estimation of affect. The risk tolerance estimation error was used as a proxy for affect. The Rutgers New Jersey Agricultural Experiment Station Investor Risk Tolerance database was used as a source of risk tolerance, demographic, and investment data. A differential prediction model demonstrated that respondents did exhibit affect. Findings from a multivariate ordinary least square (OLS) regression analysis showed that affect was associated with portfolio, controlling for demographic variables and reliance on professional advice when making investment decisions. Finally, investors who exhibited a positive or negative affect were more likely to have less of risky assets in their portfolio.

Speakers & Presenters
avatar for John Grable

John Grable

Professor, University of Georgia
We provide leading-edge teaching, research and outreach that improves the economic well-being for families, increases the quality of life in communities and prepares future leaders and entrepreneurs.Our graduates are entrepreneurs, financial planners, consumer journalists, community... Read More →
avatar for Abed G. Rabbani

Abed G. Rabbani

PhD, CFP®, University of Missouri

Saturday April 22, 2017 10:30am - 12:00pm PDT

Attendees (5)