Int. J. Business Excellence, Vol. 9, No. 2, 2016 253 Copyright © 2016 Inderscience Enterprises Ltd. An analysis on the factors influencing risk tolerance level of individual investors S.N. Geetha* Department of Management Studies, Anna University, Chennai, India Email: geetha.autc@gmail.com *Corresponding author M. Martin Selvakumar Department of Management Studies, Agni College of Technology, Chennai, India Email: martin.selvakumar@gmail.com Abstract: Risk tolerance had been gaining renewed research interest in recent years. Most of the investment decision-making models prevailing in the market use risk tolerance of investors as one major input to determine the investment plans. Owing to such prime importance, it proves to be essential to understand the factors which have significant influence on the risk level of individual investors. Though there are general heuristics that form the basis for most of the decisions made by investment managers, there had always been a word of caution noting on the level of reliability of such heuristics. This research study aims to determine if those general assumptions related to the influence of demographic variables on the risk tolerance level of individual investors are really true, with specific reference to Indian investors in the capital markets. It was concluded through the findings of the study that the general heuristics related to all demographic variables except gender, occupation and income level of investors are found to be false. It was further concluded that only gender and income level of investors were significantly influential in determining the risk tolerance level of individual investors. Keywords: demographic variables; heuristics; linear regression; risk averse; risk loving; risk neutral; risk tolerance. Reference to this paper should be made as follows: Geetha, S.N. and Selvakumar, M.M. (2016) ‘An analysis on the factors influencing risk tolerance level of individual investors’, Int. J. Business Excellence, Vol. 9, No. 2, pp.253–264. Biographical notes: S.N. Geetha is a Professor at the Department of Management Studies at Anna University, Chennai and also holding the post as Director, Center for Distance Education at Anna University. With two years of experience in industry, she has committed herself to teaching for the past 20 years. She has presented many papers at both national and international conferences and published many conceptual and research papers in national and international journals. She has been involved in the production of highly