PSYCHOLOGY AND EDUCATION (2020) 57(9): 5186-5192 ISSN:00333077 5186 www.psychologyandeducation.net Perceived Risk as a Moderator on the Relationship Between Risk Avoidance, Uncertainty Avoidance and Investment Intentions of Individual Investors Imran Arshad 1 , Ghulam Abbas 2 , Hamid Waqas 3 , Loh Chik Im 4 , Irma Tyasari 5 1 Assistant Professor, Faculty of Management Sciences, Barrett Hodgson University, Karachi, Pakistan 2 Assistant Professor, Department of Business Administration, Sukkur IBA University, Sukkur, Pakistan 3 Senior Lecturer, School of Business and Economics, Westminster International University, Tashkent, Uzbekistan 4 Lecturer, Faculty of Business, Accounting and Management, SEGi University, Kota Daman Sara, Malaysia 5 Assistant Professor, Faculty of Business and Economics, Universitas Kanjuruhan Malang, Indonesia Abstract: This study aims to advance theoretical knowledge on investment intentions of individual investors from the perspective of behavioural finance. Based on literature review, it is found that risk avoidance, uncertainty avoidance and perceived risk significantly influence the investment intentions of individuals. However, studies on behavioural finance have been unable to provide evidence on the moderating effect of perceived risk on the relationship between risk avoidance, uncertainty avoidance and investment intentions of individual investors. In other words, the role of perceived risk in strengthening or weakening the investment intentions has not been discussed by earlier researchers in the field of behavioural finance. This study fills the identified gap by proposing the moderating effect of perceived risk on the relationship between risk avoidance, uncertainty avoidance and investment intentions of individual investors. This study provides theoretical justification for the moderating role of perceived risk and future research directions to empirically examine the proposed framework. Keywords: risk avoidance, uncertainty avoidance, perceived risk, investment intention Article Received: 10 August 2020, Revised: 25 October 2020, Accepted: 18 November 2020 Introduction When making decisions, the risk factor is an important factor that can shape the decision whether or not to buy something. Finance research or specifically behavioural finance research has given much attention to the importance of risk in investment decisions (Dai et al. 2014, Lim et al. 2013, Koleczko 2012). Meanwhile, various risk-related aspects linked to individual decision-making have been highlighted by previous studies as significant factors, including risk avoidance (Disatnik and Steinhart 2015, Lim et al. 2013); uncertainty avoidance (Disatnik and Steinhart 2015, Lim et al. 2013); and perceived risk (Lim et al. 2013). In previous related studies, risk avoidance is a key concept that influences individuals’ attitude and behaviour towards investment (Simonsohn 2009, Slovic 1987). Risk avoidance is tendency of individuals to avoid that investment options perceived as risk investments (Weber and Bottom 1989). Essentially, individuals with a higher level of risk aversion usually have a low tolerance for risk as compared to those individuals with relatively low risk aversion (Disatnik and Steinhart 2015). Specifically, risk avoidance has a significant role in the financial decision-making of individuals (Disatnik and Steinhart 2015, Lim et al. 2013, Shiv et al. 2005, Zhou and Pham 2004). It can be considered that risk avoidance is an important factor in an individual’s decision to invest. In the context of this study, intentions to invest refers to intentions of individual investors to invest in the stock market. Uncertainty avoidance which refers to the extent to which individuals feel threatened by some unknown or uncertain situation (Hofstede, 2001), also remains a major concern in decision-making research (Disatnik and Steinhart 2015, Koleczko 2012, Kahneman 2011, Lim 2013). It is widely believed that a higher level of uncertainty shows a greater probability of loss in the context of financial investment (Mayfield et al. 2008). Moreover, Iyke and Ho (2017) asserted that uncertainty causes investors to invest more or less depending on their level of uncertainty avoidance. It can be argued that the uncertainty avoidance attitude of individual investors is significant for explaining the intentions to invest in the stock market. Another important concept in explaining investment-related decisions is perceived risk, which is defined as the possibility that consumers perceive uncertainty or unfavourable consequences when