A Review of the Psychology of Risk-Taking Behavior for Individual Investors


  • Katie Harnum Memorial University of Newfoundland
  • Tom Cooper Memorial University of Newfoundland
  • Alex Faseruk Memorial University of Newfoundland


This paper reviews the extensive literature within psychology and behavioral finance in order to outline the psychological underpinnings of investor risk behavior. Its objective is to provide a comprehensive understanding of the factors that influence risk propensity in investment markets. It provides an enumeration of influential factors that play a role in understanding an individual’s propensity for risk including psychological biases, personality characteristics, demographic and socio-economic factors. Such a list should be valuable, not only to researchers in behavioral finance, but also to practitioners interested in improving trading skills and recruitment practices.




How to Cite

Harnum, Katie, Tom Cooper, and Alex Faseruk. 2010. “A Review of the Psychology of Risk-Taking Behavior for Individual Investors”. Journal of Finance Issues 8 (1):19-28. https://jfi.aof-mbaa.org/index.php/jfi/article/view/2363.



Original Article