Financial Literacy, Risk Perception, and Risk Tolerance in Investment Decisions in Indonesia

Abstract

This study aims to analyze the relationship between financial literacy, risk perception, and risk tolerance on investment decisions in Indonesia through a Systematic Literature Review approach. Several scientific articles published in the last five years and indexed by Google Scholar were systematically analyzed to identify patterns of relationships between variables and trends in relevant research results. The results of the study show that financial literacy has a positive and significant effect on the quality of investment decisions, both directly and indirectly through an increase in individual risk tolerance levels. Risk perception acts as a psychological factor that mediates the way individuals assess uncertainty, opportunities, and potential returns from investment decisions. Meanwhile, risk tolerance serves as a reinforcing factor that balances courage and caution in the decision-making process. These three variables simultaneously shape rational, adaptive, and sustainable investment behavior. The findings of this study are expected to be an important reference in the development of financial education policies, the improvement of public financial literacy, and the expansion of national financial inclusion in the era of economic digitalization.