Risk tolerance Profile of investors in the Gulf States

The paper focuses on the individual characteristics and the psychological aspects of investors
that outlines their financial and investment pattern which is discussed in a subject of growing
emphasis called Behavioral Finance. Risk tolerance is the amount of predictability or uncertainty
in an investment that an investor is ready to accept or resist while looking to reap returns in the
future. One must have a thorough knowledge of his own ability and willingness to overcome
large variations in the value of his investments. Tolerance is a deciding factor that determines
the utility of any investment decision. Utility maximization is regarded as the primary concern of
any financial decision. Through this research the author analyses the Risk Tolerance of
individual investors in the Gulf States and thereby suggests a suitable investment portfolio to
them. A risk tolerance data set measurement tool is adopted here for collecting, measuring and
analyzing risk profile data. The findings drawn on the demographic factors considered for the
study are worthwhile and the correlation analysis revealed that risk tolerance and demographic
parameters are closely related each other.