Financial Literacy, Risk Perception, and Investment Decision-Making among Young Professionals
Keywords:
financial literacy, risk perception, investment decision-making, young professionals, behavioral finance.Abstract
This study conducts a systematic literature review to examine the relationships between financial literacy, risk perception, and investment decision-making among young professionals. Drawing on peer-reviewed empirical and theoretical studies, the review synthesizes evidence on how financial knowledge and subjective risk assessment jointly influence investment behavior in early career stages. The findings indicate that financial literacy enhances individuals’ ability to process financial information, reduces susceptibility to heuristic-driven bias, and supports more consistent investment strategies. Risk perception emerges as a critical psychological mechanism that shapes investment participation, asset preferences, and behavioral responses to market uncertainty. The reviewed literature further shows that risk perception frequently mediates the effect of financial literacy on investment decisions, while literacy moderates the influence of emotional and cognitive biases. Digitalization and financial technology intensify these dynamics by altering access to information and perceptions of control. Overall, the study underscores that understanding investment decision-making among young professionals requires an integrated perspective that accounts for both financial competence and subjective risk evaluation, offering implications for financial education, advisory practices, and policy development.
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Copyright (c) 2026 Ali Kablan, Özden Calay (Author)
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