Measuring student investment potential : a mixed methods approach
Masenya, Rearabetswe Winnie
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This study aimed at measuring non-investing students’ potential to invest. The study also aimed at determining what current student investors are invested in, what their sense of risk tolerance is, and what their overall perception towards investment is. A brief literature review was conducted on several topics. These topics include investment and the importance thereof; risk tolerance and how it can be influenced by demographics; as well as risk perception and its effect on an individual’s investment behaviour. Thereafter, the study implemented a mixed methods research approach wherein a qualitative phase and a quantitative phase were implemented. First, the qualitative phase was implemented wherein the researcher interviewed 21 student investors. The purpose of these interviews was to explore student investor’s investment activities, sense of risk tolerance, and overall perception towards investment. The main results from the qualitative phase of the study was that student investors invest in high risk instruments, are high risk tolerant, lack investment knowledge, and have an overall good perception of investment. Also, the transcripts from the interviews were analysed by using the Atlas.ti qualitative analysis software. From the analysis, the researcher used the main themes to create a questionnaire that could be used to measure students potential to invest, as well as to test whether or not the findings from the qualitative study could be generalised. The quantitative phase of the study made use of self-administered questionnaires which were distributed to a sample of 396 students. These questionnaires helped the researcher to determine whether or not the findings of the qualitative study can be generalised. A statistical analysis was conducted on the questionnaires by using SPSS for Windows. The quantitative phase of the study found that students are low risk tolerant, which was a contradictory finding to the risk tolerance of student investors from the qualitative study. However, in line with the qualitative study, it was found that students also have a lack of investment knowledge and have an overall perception Measuring student investment potential: a mixed methods approach v towards investment risk and investments. Therefore the study met all of its objectives. Students have the potential to invest; however, there are many factors, such as financial knowledge and awareness of risk tolerance, that need to be improved first.