The mediating role of risk tolerance in the relationship between behavioural factors of small investors and investment decisions in the saudi stock market

The aim of this study was to examine the mediating role of risk tolerance in the relationship between behavioural factors of small investors and investment decisions in the Saudi stock market. A random sample of small investors in the Saudi stock market was selected, with a sample size of 384 investors. Descriptive statistical methods such as mean, standard deviation, and frequencies were used to describe the study variables, and the mediation regression analysis was employed to test the study hypotheses. The main findings of the study revealed that individual investors' risk tolerance acts as a partial mediator in the relationship between behavioural factors and investment decision-making in the stock market. There is a significant relationship between the behavioural factors of small investors and their ability to make investment decisions in the Saudi stock market. Additionally, there is a significant relationship between risk tolerance of small investors and their investment decisions in the Saudi stock market. Based on the study findings, several recommendations were proposed, including the consideration of behavioural factors and risk tolerance of small investors by brokers and financial advisors in the Saudi stock market when providing advice and guidance on financial investments. They should also provide information based on accurate securities analysis to facilitate sound investment decisions in the Saudi stock market.