The Influence of Risk Perception on Portfolio Choice Among Mauritian Retail Investors
DOI:
https://doi.org/10.54878/7psf1d81Keywords:
Risk Perception, Portfolio Choice, Retail InvestorsAbstract
This study addresses the growing significance of comprehending behavioral aspects on investment decision-making by examining the impact of risk perception on portfolio choice among Mauritian retail investors. The study’s importance stems from its contribution to both scholarly literature and real-world financial decision-making, especially in emerging markets where investor behavior is still little understood. A structured questionnaire was used to gather primary data from a sample of 52 respondents utilizing a quantitative research methodology. The data was analyzed using statistical techniques such as multiple regression analysis, correlation analysis and reliability testing. The results confirm the validity of key financial theories. The study recommends that, to enhance investment decisions, investors should be better educated and financial information should be simplified and made more accessible. Additionally, financial advisors could better align investment plans with clients’ risk attitudes by incorporating behavioral data.
References
ASYMMETRY Capital Partners®, Global Tactical Rotation® , 2018. ASYMMETRY®Observations. [Online] Available at: https://asymmetryobservations.com/definitions/investorsrisk-tolerance-is-asymmetric/[Accessed 29 March 2026].
Aren, Z. a., 2016. Influence of financial literacy and risk perception on choice of investment.. Procedia - Social and behavioral Sciences, Volume 235, pp. 656-663.
Barber, B. a. O. T., 2001. Trading is hazardous to your wealth. Journal of Finance, 55(2), p. 773–806
Barberis, N. a. T. R., 2003. A survey of behavioural finance. Handbook of the Economics of Finance, Volume1, p. 1053–1128.
Barberis, N. a. T. R., 2003. A survey of behavioural finance.. Handbook of the Economics of Finance, Volume 1, p. 1053–1128.
Baur, D. H. K. a. L. A., 2018. Bitcoin: Medium of exchange or speculative asset?. Journal of International Financial Markets, Volume 54, pp. 177-189.
Bodie, Z. K. A. a. M. A., 2018. Investments. 11 ed. NewYork: McGraw-Hill Education.
Bodie, Z. M. R. a. S. W., 1992. Labor supply flexibility and portfolio choice in a life cycle model. Journal of Economic Dynamics and Control, 16(3-4), p. 427–449.
Bogan, V., 2008. Stock market participation and the internet. Journal of Financial and Quantitative Analysis,43(1), p. 191–211
Bryman, A., 2016. Social Research Methods. In: O. U.Press, ed. s.l.:Oxford.
Calculator.net, n.d. Calculator.net. [Online] Available at: https://www.calculator.net/sample-sizecalculator.html?type=1&cl=90&ci=10&pp=50&ps=200&x=Calculate
[Accessed 04 April 2026].
Campbell, J., 2006. Household finance. Journal of Finance, 61(4), p. 1553–1604.
Dhole, A., 2019. Orowealth. [Online] Available at: https://www.orowealth.com/insights/blog/what-isinvestment/[Accessed 29 March 2026].
Fabozzi, F., 2013. Bond markets, analysis and strategies. 8ed. Harlow: Pearson Education
Field, A., 2018. Discovering Statistics Using IBM SPSS Statistics. 5 ed. London: Sage Publications.
Financial Commission - FSC, 2025. Securities regulation and investor protection framework. [Online] Available at: https://www.fscmauritius.org/[Accessed 17 March 2026].
Greenwood, R. a. S. A., 2014. Expectations of returns and expected returns. Review of Financial Studies, 27(3), p.714–746.
Hair, J. B. W. B. B. a. A. R., 2019. Multivariate Data Analysis.. In: 8, ed. s.l.:Pearson.
Kahneman, D. &. T., 1979. Prospect Theory: An analysis of decisions under risk.. Econometrica, 47(2), pp. 263-292.
Lusardi, A. a. M. O., 2014. The economic importance of financial literacy: Theory and evidence. Journal of Economic, 52(1), pp. 5-44.
Malmendier, U. a. N. S., 2011. Depression babies: Do macroeconomic experiences affect risk-taking?. Quarterly Journal of Economics, 126(1), p. 373–416.
Malmendier, U. a. N. S., 2011. Depression babies: Do macroeconomic experiences affect risk-taking?. Quarterly Journal of Economics, 126(1), p. 373–416.
Markowitz, h., 1952. Portfolio Selection. Journal of Finance, 7(1), pp. 77-91.
Odean, B., 2001. Boys will be boys: Gender, overconfidence and common stock investment. Quarterly Journal of Economics, 116(1), pp. 621-292.
Organisation for Economic Co-operation and development - OECD, 2024. Financial literacy and inclusion indicator in Mauritius..
Ramessur, 2021. Financial literacy among young professionals in Mauritius. Journal of financial studies ,14(2), pp. 45-62.
Ramnath, S., 2021. Financial literacy and investment behaviour in emerging markets. Journal of Financial Studies, 15(3), p. 60–75.
Saunders, M. L. P. a. T. A., 2019. Research Methods for Business Students. 8 ed. s.l.:Pearson.
Selim Aren, S. C., 2019. EFFECT OF FINANCIAL LITERACY AND RISK PERCEPTION. Istanbul, Yıldız Technical University.
Slovic, P., 1987. Perception of risk. Science, 236(4799), p.280–285.
Stock Exchange of Mauritius - SEM, 2025. Investor education and market participation. [Online] Available at: https://www.stockexchangeofmauritius.com/[Accessed 17 March 2026].
Ticker, 2024. LinkedIn.com. [Online] Available at: https://www.linkedin.com/pulse/aggressivemoderate-conservative-find-bj6xf/[Accessed 29 March 2026].
TOTLA, U., 2025. Sharecart.com. [Online] Available at: https://www.sharescart.com/article/modernportfolio-theory-mpt-a-smart-investment-approach-forunlisted-shares [Accessed 29 March 2026].
Vissing-Jorgensen, 2002. Towards an explanation of household portfolio choice heterogeneity. Journal of Political Economy, 110(4), p. 825–853.
