It is a well-established fact that financial decision-making, in particular, investment is tightly coupled to human behavior. Existing research in financial investment domain assumes that investors behave rationally and that all market information is embedded in the investment process. However, human beings are not always fully rational when making investment decisions. Sometimes wrong decisions taken by angry investors lead to grim consequences, since the decisions have been made without proper analysis and rational judgment. This study investigates the relative importance of Trait anger and Trait anxiety in financial decision-making, and how religiosity and demographic factors complement these traits. The effect of these primary and mediating variables has been particularly studied in the context of predictability and riskiness of an investment decision. This research makes an argument that higher anger and anxiety would make the investment decision unpredictable and risk-prone. However, adding the moderating variables, in particular, higher age groups, education, and income, as well as religiosity would help to take risk-averse investment decisions. The empirical validity of research is carried out by conducting a survey based on a close-ended questionnaire to measure Trait anxiety and Trait anger using the Anxiety Inventory and Anger Expression Inventory-2. A total of 320 respondents across Pakistan filled up the questionnaire; the collected data is analyzed using confirmatory factor analysis and structural equation modeling. The results indicate that anger and religiosity have a significantly positive relation with predictability of an investment decision. Additionally, religiosity also seems to influence the factors that increase the riskiness. Contrary to it, the education among other demographic variables is linked to reducing the riskiness. The conclusions are of critical importance for investors and financial advisers. While prior research has shown the relevance of personality traits on investment performance, the added dimensions of demographics and religiosity add practicality to the findings.
Keywords: Trait Anger; Trait Anxiety; Gender; Religiosity; Predictability; Investment Choices.