Title
Stock Market Volatility and Changes in Financial Risk Tolerance During the Great Recession
Document Type
Article
Publication Date
2017
Abstract
This study investigated the degree to which the financial risk tolerance of individuals was influenced by volatility in the U.S. equities market during the period of the Great Recession. Based on data from a valid and reliable risk tolerance scale and return information for the Standard and Poor’s (S&P) 500 index, there does appear to be some associations between daily market volatility and changes in risk tolerance scores. Changes in risk tolerance scores were also calculated using short- and intermediate-term volatility measures. The relationships do vary, however, with evidence supporting the relationship only 64% of the time. Overall, changes in financial risk tolerance scores were found to be modest. Although not following hypothesized directions at all times, risk tolerance was not influenced by the length of volatility measurements.
Publication Title
Journal of Financial Counseling and Planning
Volume
28
Issue
1
DOI of Published Version
10.1891/1052-3073.28.1.140
Recommended Citation
Rabbani, Abed G.; Grable, John E.; Heo, Wookjae; Nobre, Liana; and Kuzniak, Stephen, "Stock Market Volatility and Changes in Financial Risk Tolerance During the Great Recession" (2017). Consumer Sciences Faculty Publications. 12.
https://openprairie.sdstate.edu/consumer-sci_pubs/12