Authors: Ashwath Hegde, Ms. Rachana. D
Abstract: Investment decisions kind a get shaped by how much risk an individual investor can handle, both in terms of the mindset and the real financial capacity to go on through uncertainty. In this study I’m looking at how risk tolerance connects with investment decisions for individual investors, in a descriptive-cum-analytical way, not only one angle. The primary information was gathered from 100 individual investors, using a structured questionnaire, which was sent via Google Forms. For the analysis, tools like mean, median, mode, Pearson’s correlation and one-way ANOVA were used, and that’s pretty much it. To make sure the scales were dependable, Cronbach’s Alpha was applied, mainly to check internal consistency so the results don’t feel randomly stitched together. The results point out that most investors have a moderate risk tolerance, so they usually go for balanced routes such as mutual funds, fixed deposits, and gold. Also, factors like financial literacy, market awareness, income steadiness and investment planning capability come out as positive drivers that improve investment behaviour. When the correlation analysis is checked, it shows moderate to strong positive associations between risk tolerance and things like financial planning, investment awareness, and investment confidence. The ANOVA outcomes suggest there aren’t statistically significant differences in investment behaviour across demographic groups, which basically hints at fairly similar decision patterns. Practically, these findings underline the need for personalised investor education programmes, clearer risk profiling frameworks and policy-level efforts too, so long-term investing stays responsible and not purely impulsive. Overall, the study adds to behavioural finance by tying investor psychology with actual financial choices, in an evidence-based manner
