Financial Risk Tolerance as a Predictor for Malaysian Employees’ Gold Investment Behavior

A. W. Ahmad Fauzi (), A. R. Husniyah (), S. Mohamad Fazli () and O. Mohamad Amim ()
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A. W. Ahmad Fauzi: Universiti Putra Malaysia
A. R. Husniyah: Universiti Putra Malaysia
S. Mohamad Fazli: Universiti Putra Malaysia
O. Mohamad Amim: Universiti Putra Malaysia

A chapter in Regional Studies on Economic Growth, Financial Economics and Management, 2017, pp 63-76 from Springer

Abstract: Abstract Economic uncertainty has led to the decision of investing in a much safer investment such as gold investment. Gold in the investment portfolio is perceived to safeguard individual investors against market risk. The Malaysian government has launched unit trust schemes under the Amanah Saham group which is a government-backed fail-safe investment. Gold investment, however, is a new phenomenon with very little promotion. The central bank has introduced the gold coin series while the private banking sector released few gold-related products. This study is performed to identify the purpose of investing, barriers to invest in gold and to ascertain financial risk tolerance as one of the predictor affecting gold investment behavior among Malaysian employees. Respondents in Peninsular Malaysia were sampled via a multistage random among urban public sector employees. Data from self-administered questionnaires revealed the main purpose to invest on gold was to have savings in the form of physical product. More than one-third of the 403 respondents reasoned out inavailability of funds for gold investment followed by the complication of gold investment procedures which they are not very familiar as the main barriers to gold investing. The significant predictors for gold investment behavior revealed were financial risk tolerance, gold investment attitude, subjective norms and perceived behavioral control with an explained variance of 30.4%. As gold investment is perceived as a safe investment, the result of financial risk tolerance as a positive significant predictor is not as expected. In addition, gold investment subjective norms surpassed the others in predicting gold investment behavior however gold investment knowledge is not significant in predicting investment on gold. It can be concluded that peer group is very important in determining a person’s intention to invest in gold. The results from this study may be utilised in marketing practices and business decisions.

Keywords: Financial risk tolerance; Gold investment knowledge; Attitude; Subjective norms; Perceived behavioral control; Gold investment behavior (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/978-3-319-54112-9_5

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