The Effect of Personality Traits and Demographic Factors on Investment Decisions Making: A Framework Proposing Risk Tolerance as a Mediator – Evidence from Egypt

This study investigated the direct impact of the personal traits and demographic factors of Egyptians, their risk tolerance on their investment decisions making. Moreover, the study engaged the mediating role of the risk consists of 135 respondents representing different segments of Egyptian investors. The tolerance in the relations among investors’ personal traits and their demographic factors and their investment decisions making. A survey was conducted to measure personality traits, demographic factors, risk-tolerance behavior and investment decisions of the respondents. The study sample main statistical methods used to test the study hypotheses were Pearson's correlation test and Structural Equation Model. The results confirmed that there is an effect of the Egyptians’ personal traits on the investment decisions making. Also, the investment experience has an impact on the investment decision making. The findings revealed that some of the personality traits have some impact on an individual’s risk-tolerance behavior. The results also revealed the partial mediating role of the risk -tolerance behavior among the personal traits and the gender of the Egyptians and their investment decisions. The study provides valuable insights to investment experts and policymakers to understand investors’ behavior in Egypt.