What does celebrating the birthday of your boyfriend/girlfriend have to do with investment personality? If your friend wants to have noodles for lunch but you prefer fried chicken, will this reflect your investment behavioural bias? You may think that your investment decisions are based on your vision, knowledge and experience, but very often they are also affected by psychological factors.

Some people spend time studying market trends, company fundamentals, and stock price charts, but they may not understand the impact of their personalities on investment behaviour. When buying the same stock, some make money while others lose. This may have something to do with investment psychology. Different personalities may associate with different behavioural biases that influences your investment decisions. Common investment behavioural biases include:

• Herding: tend to trust others and follow the crowd, and are prone to join the bandwagon due to fear of missing out.
• Risk aversion: select low-risk investments only and may result in an overly conservative investment strategy.
• Overreaction: wish to closely capture market trends and tend to be short-term. May overreact to market events.
• Overconfident: may confuse instinct as objective analysis and overlook the change of market environments.
• Expectations of high returns: tend to choose investments that offer high returns, possibly focus on returns and overlook risks.

There are many tools for testing personality on the market, among which the "Big Five Personality Test" (Big5 test) is widely used. Investment psychologists and behavioural finance economists used the Big5 test to conduct research and found that personality is closely related to investment behavioural biases. For example, extroverts who are also sentimental are more likely to have a herd mentality; introverts who value traditional wisdom are more likely to be risk-averse; people who are generally cheerful and well-organised are more likely to overreact to market events.

To find out investment behavioural bias, the first step is to understand your investment personality. Based on the Big5 test, the IFEC jointly worked with an academic team from Hong Kong Shue Yan University, The Hong Kong Polytechnic University and The University of Hong Kong to develop a fun and interactive quiz with 10 questions closely related to our daily life to help us understand our hidden investment personalities and behavioural biases. Corresponding analysis and smart tips are also provided to help overcome the biases and encourage proper investment behaviour.

Go to the quiz now! Your hidden behavioural bias may not be what you expect…