Behavioral Risk Management in Investment Strategies: Analyzing Investor Psychology

Jacob Odei Addo, Juraj Cúg, Solomon Abekah Keelson, John Amoah () and Zora Petráková
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Jacob Odei Addo: Department of Marketing and Strategy, Takoradi Technical University, Takoradi P.O. Box 256, Ghana
Juraj Cúg: Department of Economics, Faculty of Operational and Economics of Transport and Communications, University of Zilina, 010 26 Zilina, Slovakia
Solomon Abekah Keelson: Department of Marketing and Strategy, Takoradi Technical University, Takoradi P.O. Box 256, Ghana
John Amoah: Department of Marketing and Strategy, Takoradi Technical University, Takoradi P.O. Box 256, Ghana
Zora Petráková: Institute for Forensic Engineering, Faculty of Civil Engineering, Slovak University of Technology, 810 05 Bratislava, Slovakia

IJFS, 2025, vol. 13, issue 2, 1-19

Abstract: Behavioral risk management is an increasingly important consideration in investment strategies, as research has shown that investor psychology can significantly impact portfolio performance. This study examines how psychological variables influence investing choices and the effects that these actions have on risk mitigation and overall investment performance. The primary respondents for this study were the employees of Takoradi Technical University. Partial Least Square Structural Modeling was adopted for the data processing, analysis, and testing of the study’s hypotheses. The study’s findings, which were based on a carefully chosen sample of 348 investors, showed that investigating behavioral risk management in investment strategies is an effective method for thoroughly comprehending and utilizing investors’ psychology to maximize risk management procedures and enhance investment results in dynamic financial markets. Seven hypotheses were deemed insignificant, and five were considered significant. This study is limited by its exclusive focus on only one technical university. This study augmented the growing corpus of research on risk management in investment strategies.

Keywords: behavioral finance; cognitive biases; investor psychology; investment strategies; risk management (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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