Financial risk tolerance of individual investors: The case of Azerbaijan

Traditional finance theories, which argue that individuals always make rational decisions, have become insufficient to explain investor decisions over time. Behavioral finance theories that have emerged in this direction have revealed that investors do not always act rationally and that their investment decisions are affected by many factors. One of the most important factors that direct individual investors' investment decisions is financial risk tolerance. It is very important to understand how financial risk tolerances of individual investors vary according to demographic factors and to learn whether these differences affect investor decisions. In this regard, the aim of the study is "to determine the financial risk tolerances of individual investors in Azerbaijan and to analyze the differences of the determined levels according to their demographics". In line with the purpose of the research, data was obtained by applying the online survey method to 746 individual investors living in Azerbaijan. The data obtained was analyzed in the SPSS 26.0 package program. The study included demographic factors such as gender, age, marital status, education, profession and income, and it was found that the financial risk tolerance of individual investors was affected by these factors.