Do personality traits influence investors' portfolios?

•We provide evidence that portfolio decisions are influenced by personality traits.•We use survey data from the 2006-2012 waves of the US Health and Retirement Study.•Financial risk taking is negatively correlated with three personality traits.•Financial risk taking also correlates with sub-traits linked to nine traits.•Our findings shed new light on the determinants of financial risk taking.

Based on large-scale survey data from the 2006-2012 waves of the US Health and Retirement Study (HRS), we show that individual portfolio decisions are influenced by a variety of stable traits and facets traditionally investigated in the field of personality psychology. Three personality traits have a significant negative correlation with financial risk taking, as measured by the holding and the amount of stock assets: Agreeableness, Cynical Hostility and Anxiety. For Cynical Hostility a belief-based mechanism seems to be at work, whereas the impact of all the other traits seems to pass through the preferences - rather than the beliefs - channel. Our findings shed new light on the determinants of individuals' risk taking in the financial domain.