How Subjective Knowledge Impact Personal Financial Asset Allocation

With the improvement of the economic level, Chinese residents havesubstantial personal wealth increases. More and more Chinese peopleaccumulate a certain amount of financial assets which refers to stocks,bonds and other forms of assets. Many Chinese people will face theproblem of personal financial asset allocation and investment decisions.They are no longer satisfied with the savings and bonds, but to allocatemoney between various types of risk assets and risk-free assets, in order toachieve the purpose of increasing the value.For those who lack the knowledge of financial investments or withlow self-confidence in financial literacy, it is a big issue to allocate theirassets. Subjective knowledge means how much knowledge consumersthink they know, in other words, it is a self-evaluation made by consumerto evaluate their confidence. In this article, we will explore the howsubjective knowledge of consumers effect their financial assets allocationdecision. We believe that the higher the subjective knowledge of consumerthe more likely to invest in risky assets, while the lower subjectiveknowledge of consumer finance, the more inclined to invest in risk-freeassets. In addition, we add achievement motivation and informativeinfluence as the moderator introduced to the experiments. We suggest thatachievement motivation has little effect on high subjective knowledgepeople’s asset allocation, while it is more significant for low subjectiveknowledge people’s allocation. Similarly, those people with highsubjective knowledge is less vulnerable to the impact of informativeinfluence, while those with lower levels of subjective knowledge will bemore vulnerable to informative influence and change their asset allocationdecisions.