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6. Conclusions and Recommendations 1. Conclusions
MBA students are a crucial part of the employment world as the students qualify to become senior management personnel in multinational companies or become entrepreneurs, generally making numerous investment related decisions for their own benefit or on behalf of others. This study was prompted by the academic gap of having only a minimal amount of research-based information relating to the investment preferences of both male and female MBA students, in light of their attitude towards risk.
More specifically no studies highlighting risk aversion and the factors that indicate risk aversity, that could assist brokers and people in intermediary positions (in, for example, the property, insurance and stockbroker industries) in understanding the needs of the UKZN MBA dissertation students, as investors, were found. It is hoped that this study will redress some of those information gaps and assist businesses in providing more informed and improved investment services and products offerings to the male and female students.
Accordingly, the study was undertaken to explore the extent to which the UKZN MBA dissertation students are risk averse in their investment strategies and whether there are any difference or similarities between the male and female respondents. It also attempted to identify factors indicative of their risk aversion. The specific questions that are asked of the respondents in the empirical research emanated from the aspects not dealt with in previous research relating to investment strategies and risk aversion. To achieve the study objectives, the empirical research entailed an examination of the objectives, expectations, preferences and constraints of the respondents concerning their investment strategies and attitudes towards risk.
The first objective of this study was to identify the factors that indicate that the students are risk averse. Therefore the questions that were posed to the respondents were carefully phrased so that the factors that indicate their risk aversion are clearly identifiable. The second objective of the study was to prove that the students are risk
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averse. To achieve the second objective, closed-ended questions that directly asked the respondent whether he or she is risk averse was used to confirm whether or not the students are risk averse. The third objective was to determine if there are any differences in the attitudes of the male and female students in their investment strategies in terms of risk aversion. The third objective was achieved by comparing the results from objective one and objective two, in relation to the disparities in attitudes of the male and female respondents.
The findings prove that the UKZN MBA dissertation students are risk averse in that the respondents displayed attitudes of risk aversion at some stage of answering the questionnaire. The extent of risk aversion may increase or decrease depending on personal circumstances and the available investment choices. Irrespective of the population group and gender, there is little disparity in the attitudes of the male and female students. Male and female students are therefore similar in their approach to investment risk. Where disparities do exist, it is possibly attributable to the lack of investment knowledge or investing experience.
To the students, preference for household security by investing in immoveable property is most important, followed by the unknown chance of making a loss or profit on the stock exchange. Respondent income and jobs are constraints to higher investment amounts and the number of actual investments. The MBA dissertation students expect to earn higher returns once they complete their studies, hence their choice of volatile investment options.
When faced with an array of investment choices, the respondents' primary objective is to secure income during retirement rather than secure long term debt or avoid the risk of future loss. The respondents prefer not to take the risk of making their own investment choices. They are of the view that their potential for taking investments with increased levels of risk will not change if someone else (a broker) makes the investment decisions for them.
The choice of stable investment vehicles, the expectation of earning consistent returns, the need to secure funds for future liability or to compensate for potential future risk, the type of job, constraints of income and job security and the need for long-term security are also indicative of the extent of the students' risk aversity.
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The results of a T-test based on gender perceptions is indicative that generally, the male and female students have similar perceptions and opinions regarding risk aversity and investment choices. The results of the Chronbach Alpha test confirm that the variables of the empirical research are valid and reliable, in that the findings were able to measure and to achieve the objectives for the research.
The empirical research corroborates the finding of Atkinson et al. (2003), in that where the respondents have similar knowledge, wealth constraints and position at work, there is little difference in their investment behaviour and choices. The observations confirm the results of Johnson et al. (2003), whose results were corroborated by Dwyer et al. (2002), that while women are generally more risk averse, an exception are female managers and professional women who have similar risk preferences to their male counterparts.
An assessment of the results of the empirical research confirms that the study was able to explore the statement of problems, meet the research objectives and answer the research questions. However, a limitation of the study is the lack of information relating to the decision-making process and who makes the investment decisions in the respondents' homes. Another limitation is that the study does not explore the preferences, constraints, objectives and expectations in relation to each of the numerous types of available investment products or the detailed personal circumstances leading to the investment decisions of the respondents.
6.2. Recommendations for future study
Sub-section 5.3, above, described the limitations of the empirical research. Based on the above-mentioned limitations, this section makes suggestions for future research.
It is recommended that future research be undertaken across all of the accredited MBA institutions in South Africa. Such a study undertaken at a macro level will provide corroboration or varying results of the findings in the research conducted at a micro level. It is further recommended that the research be funded by government via an institution like the National Research Foundation ("NRF").
In light of ensuring more accurate results, it is suggested that future studies measure the study variables at different times, namely, prior to, during and post the investment decision-making stages. Future studies should also focus on the detail of the
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reasons relating to the decision-making process and the identification of the decision maker in each respondent household.
In addition to this, a longer research timeline will allow for greater understanding of the discrimination in terms of investor choice and the reasons for the investment decisions (expectations, objectives, constraints, and preferences) that affect risk aversity. A further suggestion is that future studies investigate the cultural, historic, religious and traditional factors that affect the preferences and constraints of the investor (and hence risk aversity).
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