The frequency of incomplete portfolios consisting of a few risk-free assets is an important issue in household portfolio selection, and its cause has not yet been satisfactorily identified. Using data from the Shaanxi Province survey of rural residents’ financial assets in China, this paper validates the influence path model of household portfolios to understand the determinants of rural household’s ownership of risky financial assets. The structural equation modelling method is used to illustrate the complex relationship between household portfolio allocation and influencing factors. The results show that holding risky financial assets is directly determined by total financial assets, risky investment intentions and financial market knowledge. Ability, desire and awareness are all indispensable for holding risky financial assets, which can explain most of the incomplete participant problem. Household wealth, financial literacy, age and education have indirect influences along different paths through these three mediation variables. In addition, a second house is separated from real estate that only includes the residential house and defined investments. A path analysis also shows that real estate (residential house, home appliances and vehicles) does not have a significant effect on holding risky financial assets, while an investment house will crowd out and substitute financial assets and have a negative influence on holding risky financial assets. The findings could help explain the fairly simple and safe structure of the typical household portfolio in rural China and other undeveloped regions and may also have important policy implications for developing risky financial markets in similar regions.