Financial Literacy and Return on Investment Portfolio of an Investor-Beginner: Is There a Link?

Svetlana V. Bekareva; Ekaterina N. Isupova; Anastasiya I. Ivanova; Anna V.  Getmanova

doi:10.17323/vo-2025-22138

Svetlana V. Bekareva Novosibirsk State University http://orcid.org/0000-0003-0598-278X
Ekaterina N. Isupova Novosibirsk State University; Siberian Branch of the Russian Academy of Sciences https://orcid.org/0000-0003-3931-3373
Anastasiya I. Ivanova Novosibirsk State University; Siberian Branch of the Russian Academy of Sciences http://orcid.org/0000-0001-8969-988X
Anna V. Getmanova Novosibirsk State University http://orcid.org/0000-0003-3841-7496

DOI: https://doi.org/10.17323/vo-2025-22138

Keywords: financial literacy, investor-beginner, investor behaviour, investment portfolio’s return

Abstract

A speedy development of the private investment market is one of the characteristics of the most modern economics in the world. In general, financial literacy is regarded by the regulators and financial analysts as an important component of the responsible behaviour of the consumers of financial services. The article is devoted to finding the most significant factors that affect the profitability of the investment portfolio of young investors-beginners. Moreover, we paid attention to the level of financial literacy as a factor of investment success. The study was conducted on a sample group of 550 university students from the Economics Faculty of the University. Their educational task was to create a virtual short–term investment portfolio during 2020 – 2023. This period was characterized by various economic and financial shocks in the Russian and the world economies that have been taken into consideration as well. We used a binomial logistic regression as the method of our research. The coefficients of regression were converted into the odds ratios in order to interpret the results correctly. To sum up, we concluded that the one factor of financial literacy is insignificant for the probability to get a positive return of an investment portfolio for a young investor-beginner, but it can be significant in combination with some behavioral characteristics of an investor. The probability to receive an investment portfolio’s return depends on such behavioral aspects as risk propensity, collective nature of decision-making, responsibility and dedication to investment issues. Finally, the situation in a national economy and turbulence on the financial markets influences a young private investor’s success.

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