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Prof. Paul Sudnik

Munich University of Applied Sciences, Germany

Under my editorship the International Journal of Social Science and Humanity will be centered around the idea of new and emerging IT advancements geared towards finding solutions in tackling the problems and challenges that we face in the 21st century.

Home> Archive> 2012> Volume 2 Number 2 (Mar. 2012)
IJSSH 2012 Vol.2(2): 133-138 ISSN:2010-3646
DOI: 10.7763/IJSSH.2012.V2.82

Information Searches Affect Individual Investment Preferences: Testing a Moderating Effect of Income

Shun-Yao Tseng

Abstract—Risk-taking in investment decision-making is a major means to create individual wealth. Investors search information for risk-reducing strategies in risky investment decision-making. Digital information on financial measures and advice-seeking information are two usual studied variables in information searching. This study extends the information search aspects to discuss heuristics reliance to enrich our understanding of individual risk-taking in investment choices. A test for differences based on income is also conducted. In addition, this article discusses two forms of risky investments, stocks/options investments as well as mutual funds investments. We test our model with a sample of experienced investors by confirmatory factor analysis and hierarchical regression analysis. The results show that heuristics have a strong positive effect on mutual fund investment preferences. An increase of advice-seeking information search significantly increases individual interest in stocks/options investment for high-income investors. Accordingly, implications for financial consultants and ethics issues are discussed as well.

Index Terms—Heuristics, income, information search, investment preference.

Shun-Yao Tseng is with the Department of International Trade, College of Hsing Wu, Taipei, Taiwan.101, Sec.1, Fenliao Rd., Lin Kou Township, Taipei County 244, Taiwan (e-mail: 078013@mail.hwc.edu.tw).

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Cite: Shun-Yao Tseng, "Information Searches Affect Individual Investment Preferences: Testing a Moderating Effect of Income," International Journal of Social Science and Humanity vol. 2, no. 2, pp. 133-138, 2012.

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