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The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age

Financial literacy affects stock market participation, as well as individuals’ age, gender, income, and education level. However, measuring financial literacy is more appropriate to identify individuals with strong knowledge of finance rather than average individuals with general knowledge. This cou...

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Detalles Bibliográficos
Autores principales: Lee, Rain, Sil, Jin, Jung, Euijin
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Oxford University Press 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8681843/
http://dx.doi.org/10.1093/geroni/igab046.3290
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author Lee, Rain
Sil, Jin
Jung, Euijin
author_facet Lee, Rain
Sil, Jin
Jung, Euijin
author_sort Lee, Rain
collection PubMed
description Financial literacy affects stock market participation, as well as individuals’ age, gender, income, and education level. However, measuring financial literacy is more appropriate to identify individuals with strong knowledge of finance rather than average individuals with general knowledge. This could be problematic to identify general participation of the stock market and investment as more individuals are now participating without having to have such knowledge. This study explored how individuals’ subjective financial skills and well-being affect investment participation by age. Overall, males are likely to participate more in both retirement and non-retirement investment. In between the boomer generation and younger group, the younger generation who reported participating in a non-retirement investment, such as stock market were having a higher score on subjective financial well-being (STDYX = .052, 95% CI [.07, .08]; p < .05). Importantly, among the older group, subjective financial skill score becomes a predictor of participating stock market (STDYX = .09, 95% CI [.01, .17]; p < .05). As the result suggest, while younger participants focus more on financial well-being, such as having security on finances, when they are participating in a non-retirement investment, whereas older adults are likely to invest based on their beliefs on financial skills regardless of secured finances. A retirement plan has shifted toward less on savings and more on investing. Older adults are now interested more in participating in investments, such as the stock market than the young population, and the proper preparedness for those older adults in participating in the investment is needed.
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spelling pubmed-86818432021-12-20 The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age Lee, Rain Sil, Jin Jung, Euijin Innov Aging Abstracts Financial literacy affects stock market participation, as well as individuals’ age, gender, income, and education level. However, measuring financial literacy is more appropriate to identify individuals with strong knowledge of finance rather than average individuals with general knowledge. This could be problematic to identify general participation of the stock market and investment as more individuals are now participating without having to have such knowledge. This study explored how individuals’ subjective financial skills and well-being affect investment participation by age. Overall, males are likely to participate more in both retirement and non-retirement investment. In between the boomer generation and younger group, the younger generation who reported participating in a non-retirement investment, such as stock market were having a higher score on subjective financial well-being (STDYX = .052, 95% CI [.07, .08]; p < .05). Importantly, among the older group, subjective financial skill score becomes a predictor of participating stock market (STDYX = .09, 95% CI [.01, .17]; p < .05). As the result suggest, while younger participants focus more on financial well-being, such as having security on finances, when they are participating in a non-retirement investment, whereas older adults are likely to invest based on their beliefs on financial skills regardless of secured finances. A retirement plan has shifted toward less on savings and more on investing. Older adults are now interested more in participating in investments, such as the stock market than the young population, and the proper preparedness for those older adults in participating in the investment is needed. Oxford University Press 2021-12-17 /pmc/articles/PMC8681843/ http://dx.doi.org/10.1093/geroni/igab046.3290 Text en © The Author(s) 2021. Published by Oxford University Press on behalf of The Gerontological Society of America. https://creativecommons.org/licenses/by/4.0/This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/ (https://creativecommons.org/licenses/by/4.0/) ), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
spellingShingle Abstracts
Lee, Rain
Sil, Jin
Jung, Euijin
The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age
title The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age
title_full The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age
title_fullStr The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age
title_full_unstemmed The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age
title_short The Association between Subjective and Objective Financial Knowledge: Path Analysis to Investor Behavior by Age
title_sort association between subjective and objective financial knowledge: path analysis to investor behavior by age
topic Abstracts
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8681843/
http://dx.doi.org/10.1093/geroni/igab046.3290
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