Understanding the impact of investment literacy and risktolerance on young adults' investment choices

The primary factors affecting people's choices with investments are their comprehension of ‎investments and their comfort with risk. This research assesses investment knowledge and risk ‎appetite among respondents with varied demographic characteristics. The research focuses ‎particularly on the relationship between investment literacy as well as risk tolerance, along ‎with their combined effect on the investment choices of students and additionally working ‎people aged 18-28.‎The study collected responses from 208 participants via an online survey. The study assessed ‎participants’ investment literacy and risk preferences using a validated scale, and particular ‎statistical analyses, such as Mann-Whitney U, Kruskal-Wallis, and logistic regression, were ‎applied. The findings indicate that while investment literacy improves financial awareness, it ‎does not substantially influence people’s willingness to engage in high-risk investments. ‎People who can take on greater risk are 1.9 times more likely to put money into assets that ‎have more risk. Although gender influences risk tolerance, it does not directly affect ‎investment choices.‎The study’s results stress that investment literacy alone does not increase risk perception. ‎Instead, other external factors are im-portant to address. These findings stress the need for ‎targeted investment literacy programs that carefully improve financial knowledge, integrating ‎many behavioral understandings to support thoroughly well-informed decision-making. This ‎study improves the broader comprehension of the psychological factors influencing ‎investment decisions, especially for younger investors‎.