This study examines how personality traits and stock market expectations influence portfolio decisions among investors aged 50 and older during periods of market volatility. Using data from the 2018 and 2020 waves of the Health and Retirement Study, the research reveals associations between psychological characteristics and investment behavior during the COVID-19 market volatility. Drawing on the Meta-theoretic Model of Motivation and Personality, the study analyzes how elemental traits (Big Five personality characteristics) and compound traits (positive and negative affect) relate to stock market expectations and subsequent portfolio decisions. Results suggest that stock market expectations play a key role in connecting broader personality dispositions to investor behavior. The findings have important implications for financial practitioners, policymakers, and consumer advocates. Financial professionals can use these insights to identify clients who may be more prone to reactive decision-making during market uncertainty. Consumer protection policies can be enhanced by understanding which investors might be more vulnerable to potentially harmful portfolio adjustments. Additionally, the research informs how educational initiatives and financial technology can be tailored to support more effective consumer financial decision-making during periods of market volatility, particularly for older investors approaching or in retirement.
