STUDY IN RELATING ERSONALITY STYLE AND INVESTOR’S INVESTING DECISION

• Main Author: Grace Fransiska Damanik, Uly
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/72406
• Institution: Institut Teknologi Bandung

Make a decision is one of human behavior and investment decision-making is one of the real and crucial decision in human life. Human is individuals who behave rationally when making a financial decision. It can be seen as one of the conventional financial theory. However, there are various studies argued that there are other factors such as mood, emotions, and other characters that can influence a personal behavior. Moods, emotion, character, temperament and sociability are the part of personality aspect. William Moulton tests personality aspect by DiSC assessment. Change in mood and emotion can influence people decision. Making a decision that affected by moods and emotions can lead people in an unpredictable or irrational manner. This irrational decision reflects as behavioral bias. This study uses experimental economics approach to examine the relation between personality styles and investment decision in Indonesia. The paper finds a relation of personality style (DiSC) and investment decision-making. The personality style can develop the investor risk preference and define the biases that happen commonly according to their personality. Understanding the role of personality prevent excessive risk taking or risk aversion in making an investment decision. Know the personality well can make an investor more carefully when making an investment decision and prevent them from making an irrational decision. The irrational decision often occurs unconsciously. The bias can be a wrong decision and makes a loss for the investor.