Impact of Behavioral Finance Trends on Risk-Taking

Abstract

Purpose – In traditional finance theories, human psychology does not matter, since people areassumed to act rationally. The purpose of this study is to analyze the irrational behavior of investors.It is to reveal the behavioral tendencies of investors when making investment decisions and howthese trends affect investors' risk-taking levels (risk tolerances).

Design/methodology/approach – Questionnaire data collection technique, one of the quantitativeresearch methods, was used in the study. The main mass of the research is call center employees ofa company in the telecommunications sector. Data were obtained from 401 participants randomlyselected between November and December 2019. Research findings were used to measure thebehavioral tendencies and risk-taking levels of investors with descriptive statistics using SPSS 23.00,and correlation (relationship), regression (impact) and t-test (difference) analyzes were performedon behavioral finance and risk-taking level.

Results – According to the results of the research, it was observed that behavioral finance tendenciesof the participants on investment decisions were close to high levels (3,629). As the behavioralfinance attitudes of the participants increase, their financial risk-taking levels also increase. 91% ofthe change in risk taking level is explained by behavioral finance tendency. At the same time, it was found that the financial risk tolerance scores of men were higher thanwomen.