Year: 2021
Type: dissertation
Abstract: This Master's Thesis research is focused on the intergenerational differences part of the behavioural finance.To establish whether there is relationship between generational identity and investment preferability three research questions were set to be answered: How do generations of people differ in terms of investment preferability? How different generations of people react to investment advisory (recommendation)? What are the current investment trends among generations, and where could they lead?In order to gather empirical data, to answer research questions, a questionnaire was created.It comprised out of three sections.First section, investment experiment where respondents were offered to create a portfolio out of 9 asset types.Second section, financial literacy check.Third section, personal social questions on age, gender, education and preferabilities in investment.After collecting, cleaning and normalizing response data, we were able to statistically test it out.Answering first research question, data analysis showed that generational investment averages do indeed statistically significantly differ, depending on the asset.Out of 54 t-Test results, 13 allowed to reject null hypothesis.To highlight: Gen Z invested the most into cryptocurrencies, Gen Y into start-ups, Gen X into private property and Gen BB into tech.companies.To answer second research question we compare average invested values of the group which completed the investment experiment without any advice, and a group which received advice from the Vanguard Group.As a result, for every generation there is at least one asset, for which advice group invested average is statistically significantly higher, compared to the no advice group.Additionally, sum of the invested funds into advised assets, are from 40 to 80% higher for the advice group.Finally, we were able to discover two intergenerational trends in the world of investment: percentage of the financially literate population is growing with age and preferability of sustainable investment is declining with age.Those relations were tested with the Cramer's V.
Author: Ivan Falimendikov
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3184273139