Abstract
We investigate individual investors' tolerance towards financial risk by focusing on changes associated with the global financial crisis (GFC) of 2007-2009. Financial risk tolerance (FRT) is analysed longitudinally controlling for demographic, socio-economic and regional variations. In absolute terms, the change in FRT is small and contrasts with a popular view that risk tolerance is an elastic psychological state overly influenced by the pervading market conditions. Even in the presence of significant financial events, FRT tends to be a reasonably stable attribute in the shorter term but possibly influenced and reshaped by events more gradually over time.
| Original language | English |
|---|---|
| Pages (from-to) | 165-185 |
| Number of pages | 21 |
| Journal | Accounting and Finance |
| Volume | 55 |
| Issue number | 1 |
| Early online date | 7 Nov 2013 |
| DOIs | |
| Publication status | Published - 1 Mar 2015 |
| Externally published | Yes |