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Thursday, May 17 • 5:15pm - 6:45pm
A2c-Risk Tolerance and Portfolio Allocation

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Rui Yao, Chen Xu - Risk tolerance is critical in household investment decision-making. Being consistent in risk tolerance and actual portfolio risk is especially important because a mismatch between the two will likely lead to investment mistakes and increase the probability of loss. This study explores the relationship between risk tolerance and portfolio risk in households' portfolio of risky financial assets. Findings show that a higher level of risk tolerance was associated with a higher probability of investing all risky financial assets in stocks. However, 15% of households who were unwilling to take any risks allocated 100% of their risky assets in stocks. Implications to investors and financial advisors are provided.

Presenters
avatar for Rui Yao

Rui Yao

Associate Professor, University of Missouri
Rui Yao, PhD, CFP®, is the current President-Elect for ACCI 2017-18 and an Associate Professor and Director of Graduate Studies in the Personal Financial Planning Department at the University of Missouri. Dr. Yao received her doctoral degree from The Ohio State University. Her research... Read More →


Thursday May 17, 2018 5:15pm - 6:45pm
Gulf

Attendees (1)