Understanding the influence of investors' risk perception on investment decision-making in South Africa’s financial markets

Bosede Olatomi Ige and Stanley Chibuzor Onwubu
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Bosede Olatomi Ige: DUT
Stanley Chibuzor Onwubu: Durban University of Technology

International Journal of Research in Business and Social Science (2147-4478), 2025, vol. 14, issue 6, 108-120

Abstract: This study investigates the factors influencing investment decision-making within South Africa's financial markets, focusing on psychological, demographic, and external market elements. Drawing from Prospect Theory, the research reveals a deviation from traditional behavioral assumptions, highlighting that external market dynamics, rather than individual risk perceptions or demographic traits, predominantly guide investor behavior. Using a quantitative cross-sectional design, data were collected through structured questionnaires from 120 randomly selected South African investors aged 18 and older with market experience. Structural equation modelling assessed factors influencing risk perception and subsequently, investment behavior. The findings demonstrate that market-related variables significantly influence risk perception (? = 0.653, p

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:rbs:ijbrss:v:14:y:2025:i:6:p:108-120

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