Behavioral Finance

First, our team interviewed a number of professionals and distributed a questionnaire in the public as a survey to understand behavioural finance.

The questionnaire consisted of questions about risk appetite, ambition, life circumstances, financial goals, etc.

An individual was classified into one of 5 types based on the answers. Each type has a certain maximum risk threshold, or minimum returns threshold, or both.

This risk/return threshold(s) were then used for portfolio optimization.

Questionnaire

Question 1: The Coin Knowledge [Investment Experience] 3%

We come across different types of treasure hunt adventures, some very magical. How well do you understand these types of treasure hunts?

• a. I know all about these adventures, like an expert! (Expert, 2 coins)
• b. I understand them quite well, like an enthusiast. (Enthusiastic learner, 4 coins)
• c. I know a bit about them, just the basics. (Basic explorer, 6 coins)
• d. I don't know much about these magical adventures, just the simple parts. (Simple explorer, 8 coins)
• e. I don't understand them at all, like a beginner explorer. (Newbie explorer, 10 coins)

Question 2: The Coin Loss Adventure [Drawdown] 18%

Imagine you have a magical coin collection, and suddenly, you lose some coins! How do you feel if you lose a few precious coins during your adventure?

• a. I'm okay with it, treasure hunting is fun! (The adventurous type, 2 coins)
• b. I feel a little sad but keep searching. (Brave and cautious, 4 coins)
• c. I get worried and look for more coins. (Curious explorer, 6 coins)
• d. I get really upset and plan to stop the adventure. (Nervous explorer, 8 coins)
• e. I panic and stop the adventure to protect my coins. (Scared explorer, 10 coins)

Question 3: The Risk-Reward Treasure Hunt [Risk-Reward Ratio] 17%

"Do you like the idea of getting lots of coins even if it might be a bit tricky?”

In our treasure hunt adventure, we find special coins that promise big rewards but also have risks. What do you think about using these special coins for your treasure hunt?

• a. I love getting lots of coins, even if it is tricky to get them! (Fearless adventurer, 2 coins)
• b. I like the idea, but I'll be careful with protecting them. (Brave and cautious, 4 coins)
• c. I'd rather have some coins and be safe. (Balanced explorer, 6 coins)
• d. I want some coins, but I don't want any trouble. (Cautious explorer, 8 coins)
• e. I want to keep my coins safe, even if I don't get many. (Super cautious explorer, 10 coins)

Question 4: The Time Travel Coin Hunt [Time of Investment] 12%

Our adventures can last for different amounts of time. How long are you ready to keep searching for special coins?

• a. I'm in it for the long haul, over a decade! (The time traveler, 2 coins)
• b. I'll search for a good while, but not more than seven years. (Explorer with time, 4 coins)
• c. I want my adventure to be more than a couple of years. (Short-term explorer, 6 coins)
• d. I prefer a quick adventure, only a year or two. (Speedy explorer, 8 coins)
• e. I want the adventure to end soon, within a year. (Hurry-up explorer, 10 coins)

Question 5: The Age of the Treasure Hunters [Age] 10%

In our treasure hunt, we have different ages of fellow treasure hunters. Which group do you think you belong to?

• a. I'm with the young and energetic treasure hunters! (Adventurous youth, 2 coins)
• b. I'm with middle-aged explorers who know a lot. (Explorers in their prime, 4 coins)
• c. I'm with the experienced explorers with stories to share. (Wise explorers, 6 coins)
• d. I'm with the seniors, very experienced treasure hunters. (Seasoned explorers, 8 coins)
• e. I'm with the legendary explorers who've seen it all! (Treasure hunting legends, 10 coins)

Question 6: The Risky Coin Exposure [Mindset] 5%

We have magical coins that promise big rewards but come with higher risks. How many of these magical coins are you willing to use for your treasure hunt?

• a. I'll use many magical coins, the risk doesn't scare me! (Fearless coin user, 2 coins)
• b. I'll use a good number of magical coins, but I'll be cautious. (Cautious coin user, 4 coins)
• c. I'll use a moderate number of magical coins, not too many. (Balanced coin user, 6 coins)
• d. I'll use a few magical coins, but I'll be very careful. (Careful coin user, 8 coins)
• e. I'll use only regular coins, no magical ones. (Safe coin user, 10 coins)

Question 7: The Coin Rollercoaster[Volatility] 13%

Sometimes during the treasure hunt, our treasure value goes up and down quickly. How do you feel when this happens?

• a. I stay calm, knowing the adventure is exciting! (Calm coin rider, 2 coins)
• b. I check the treasure value but don't rush to exchange. (Steady coin rider, 4 coins)
• c. I think about exchanging but wait for a stable time. (Patient coin rider, 6 coins)
• d. I exchange my treasure often to reduce the ups and downs. (Active coin rider, 8 coins)
• e. I get nervous and exchange treasure quickly when the value dips. (Nervous coin rider, 10 coins)

Question 8: The Treasure Goal[Investment type] 11%

In our treasure hunt, we can aim for different types of treasures. What kind of collection do you want from your adventure?

• a. I want to gather lots of treasures and grow them! (Treasure collector, 2 coins)
• b. I'd like a mix of treasures, some growth, and some regular. (Balanced treasure hunter, 4 coins)
• c. I want to protect my treasures and have a bit of growth. (Protective treasure keeper, 6 coins)
• d. I want treasures that give me some regular income with a little growth. (Income treasure seeker, 8 coins)
• e. I want to keep my treasures safe, no risks, just protection. (Safety-first treasure keeper, 10 coins)

Question 9: The Quick Coin Access [Liquidity] 11%

In our adventure, there are times when you need quick access to your coins. How important is it to you?

• a. I'm focused on the adventure! Quick access isn't a big deal. (Adventure-first coin holder, 2 coins) b. It's nice to have quick access, but not super important. (Easygoing coin keeper, 4 coins)
• c. I think about having quick access when needed, but it's not my top priority. (Considerate coin holder, 6 coins)
• d. I'd like to have quick access to my coins. (Quick-reach coin holder, 8 coins)
• e. I want it all the time. Quick access is crucial. (Quick-reach coin protector, 10 coins)

Calculate your total coin points based on your adventure choices!

Investor Profile:

• 200-360 coin points: Super Daring Treasure Explorer 🏴‍☠️ (Highly Aggressive)
• 361-520 coin points: Clever Treasure Adventurer 🗺️ (Moderately Aggressive)
• 521-680 coin points: Balanced Treasure Keeper 💰 (Balanced)
• 681-840 coin points: Cautious Treasure Protector 🔐 (Moderately Conservative)
• 841-1000 coin points: Super Careful Treasure Guardian 🦉 (Highly Conservative)