Emotional Quotient and Intelligence Quotient on Behavioral Finance and Investment Performance

Abstract

Investing is increasingly becoming an important way of creating wealth. A successful investment requires one to have proper analytical skills, intelligence, emotional control, and common sense. It also requires investors to behave rationally when making decisions and consider logic rather than emotions or perceptions. The purpose of the study is to examine whether education, emotional quotient, and intelligence quotient have a positive influence on investment performance and decision-making. In addressing the research problem, there is a review of previous literature on the topic. The review provides an understanding of the contribution other authors in understanding the link between EQ, IQ, and education in investment performance and decision-making. According to the findings, EQ has positive effect on the investment decisions and performance. Individuals with high levels of IQ are more likely to take risks than the ones with low IQ. It demonstrates the effects of an individual’s cognitive ability on decision-making and investment performance. The research has also indicated that education and experience are critical in making investment decisions.