Risk tolerance of South African investors: marital status and gender

Abstract

Risk can have a positive, neutral or negative effect on investors. As a result, the willingness of investors to accept risk is displayed in their risk attitude which is determined by demographical factors. Previous research indicated that demographical factors influence the financial risk tolerance of investors. However, opposing opinions exist regarding the influence of marital status on the financial risk tolerance of investors. Therefore the historical research remained uncertain and inconclusive but provided this study with a research opportunity. It is therefore important to investigate the influence of marital status and gender on investors’ risk tolerance levels. Hence, this study aimed to determine the risk tolerance levels of South African investors based on their marital status and gender where investment companies can use these findings to more accurately profile South African investors. Results indicated that male investors who have never been married are more risk tolerant than married and no longer married investors. Although female investors are deemed less risk tolerant compared to males, married and no longer married investor were also less risk tolerant than female investors who have never been married.

Keywords: South Africa, marital status, gender, risk tolerance, investors