Market Volatility and Financial Satisfaction: The Role of Financial Self-Efficacy

Sarah Asebedo, Patrick Payne

Research output: Contribution to journalArticlepeer-review

13 Scopus citations

Abstract

This study investigates the role of financial self-efficacy (FSE) in moderating the relationship between market volatility and financial satisfaction within a sample of 3,405 adults 50 years old and over from the Health and Retirement Study. Results revealed that market volatility had no statistically significant effect with financial satisfaction for those with moderate or high FSE, but market volatility did have a negative effect for those with low FSE. Results suggest that FSE is an important predictor of financial satisfaction amidst market volatility and should be considered when establishing an appropriate asset allocation for client portfolios.

Original languageEnglish
Pages (from-to)42-52
Number of pages11
JournalJournal of Behavioral Finance
Volume20
Issue number1
DOIs
StatePublished - Jan 2 2019

Keywords

  • Financial satisfaction
  • Financial self-efficacy
  • Market volatility
  • Risk tolerance
  • Social cognitive theory of self-regulation

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