Do personality traits influence investors’ portfolios?

Based on large-scale survey data from the 2006–2012 waves of the US Health and Retirement Study (HRS), we show that individual portfolio decisions are influenced by a variety of stable traits and facets traditionally investigated in the field of personality psychology. Three personality traits have a significant negative correlation with financial risk taking, as measured by the holding and the amount of stock assets: Agreeableness, Cynical Hostility and Anxiety. For Cynical Hostility a belief-based mechanism seems to be at work, whereas the impact of all the other traits seems to pass through the preferences – rather than the beliefs – channel. Our findings shed new light on the determinants of individuals’ risk taking in the financial domain. © 2017 Elsevier Inc.