Profile of Risk Adventurous South African Investors Using Structural Equation Modeling

Anzel van den Bergh-Lindeque, Suné Ferreira-Schenk, Zandri Dickason-Koekemoer


Financial environments are becoming increasingly complex, paired with decisions involving greater risk. Due to this complexity, investors who are not usually willing to take on higher risks are urged to be more adventurous in their risk-taking behaviors to achieve desired investment outcomes. This study aims to profile risk adventurous South African investors through a structural equation model based on endogenous and exogenous factors that could influence investors’ risk tolerance behavior. The non-probability purposive sampling method was used to filter individual investors from an investment company. The sample size of 463 individual investors was considered adequate for quantitative data analysis. This risk profiling model makes a notable and exclusive contribution to the field of study and the financial industry. It enables individual investors to make informed investment decisions in line with their investment goals and objectives. Consequently, financial practitioners can profile the risk tolerance behavior of adventurous investors more accurately in a complex financial environment.


Keywords: risk tolerance, behavioral finance, risk profiling.



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