Investment experience to expected return: Consequences of risk behavior

Ismiyanti, Fitri and Mahadwartha, Putu Anom (2020) Investment experience to expected return: Consequences of risk behavior. In: Proceedings Of 3rd Global Conference On Business Management And Entrepreneurship (GC-BME 3), 8 August 2018, Bandung.

PDF Putu Anom_Investment experience to expected retum-sertifikat penulis 1.pdf Download (2MB)

Abstract

Decision making for financial products requires scientific justification because it involves uncertainty in returns and financial risks. This study aims to examine the effect of investment experience on risk propensity, risk propensity to risk perception, risk perception to return expectation and investment experience to return expectation. Past investment experience acts as an anchor of benchmarks and the basis of individual decision making in investment. Risk propensity and risk perception are risk behaviors that show a person’s attitude and behavior based on previous investment experience, while the return expectation of the financial products reflects the decision of individual investors on the chosen investment opportunities. This study expects to discover how the influence of past investment experience on variable risk propensity, risk propensity to risk perception, and the effect of investment experience on return expectation. Participants are investors and traders of financial instruments in the capital market. This study uses Structural Equation Modelling to test the hypothesis. The result showed that investment experience has positive effect on risk propensity of investors. Higher investment experience will increase the awareness of investors toward risk. Risk propensity has negative effect on risk perception, therefore will support the investors perception toward reducing risk mechanism. Risk perception has positive effect on return expectation, while investment perception has insignificant effect on return expectation. The result showed that investment perception has indirect effect to return expectation through risk perception.

Item Type:	Conference or Workshop Item (Paper)
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:	Faculty of Business and Economic > Department of Management
Depositing User:	Ester Sri W. 196039
Date Deposited:	03 Nov 2022 04:03
Last Modified:	20 Jul 2023 02:02
URI:	http://repository.ubaya.ac.id/id/eprint/42840

Actions (login required)

View Item