Impact of investors' non-cognitive factors on financial behavior and financial well-being: An empirical investigation for investment performance from a self-control perspective

Abstract

This study investigates the impact of investment characteristics on financial well-being and behavior, with an especially strong focus on financial anxiety. The study looks at non-cognitive factors such as anchoring, overconfidence, and optimism, as well as their impacts on investment performance, with the mediating role of financial management behavior and anxiety. We used confirmatory factor analysis (CFA) and structural equation modeling (SEM) to investigate 206 active traders on the Pakistan Stock Exchange. The results indicate that excessive overconfidence and anchoring have a negative impact on financial management, whereas optimism has a positive effect. Self-control influences the relationship between financial management behavior, anxiety, and investment performance, enabling investors to manage their anxiety and achieve better results. Discussions also cover the effect of management styles on various outcomes.

Keywords : Overconfidence, Investment performance, Financial behavior, Financial anxiety, Self-control