Role of Risk-Taking Capacity of Investors in Their Choices for Investment Avenues: An Empirical Study

Abstract

Risk-taking capacity is an important factor that influences investment decisions. It encompasses both the financial ability to bear losses and the psychological inclination to embrace uncertainty. A thorough understanding of risk-taking capacity is essential for making informed investment choices and achieving long-term financial goals. This analysis delves into the nature of risk-taking capacity, examining its empirical implications on investment decisions. It explores the role of risk perception, life stage, social and cultural factors, technology, ESG considerations, global economic conditions, regulatory environment, psychological resilience, risk literacy, and the role of financial advisors in influencing risk-taking capacity. Study survey was conducted among 236 investors to know the factors that determines the role of risk-taking capacity of investors in their choices for investment avenues and found that Risk Tolerance, Financial Goals, Diversification and Market Conditions are the factors that determines the role of risk-taking capacity of investors in their choices for investment avenues.