Influence of information search on risky investment preferences: Testing a moderating role of income

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 means 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 self-reported measurement. The findings thus expect to show that information searches and income have dramatic effects on investment preference variation. Accordingly, implications for financial consultants and ethics issues are discussed as well.

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