scholarly journals Investors’ Behavior and Perceptions Towards Stock Market: Structural Equation Modeling Approach

2018 ◽  
Vol 7 (4.36) ◽  
pp. 586
Author(s):  
D. Kinslin ◽  
V. P. Velmurugan
Keyword(s):  
Decision Making ◽  
Stock Market ◽  
Structural Equation ◽  
Tamil Nadu ◽  
Investment Decision ◽  
Equation Modeling ◽  
Stock Indices ◽  
Investment Decision Making ◽  
Irrational Behavior ◽  
Decision Making Behavior

Investors’ behavior and perception towards stock indices performances of the stock market was taken into account for this study. Relevant data was collected from 416 equity investors indulged in the stock market situated in diverse parts of southern Tamil Nadu, India. This research focuses on how the investors’ perceptions regarding stock indices movements of stock markets are affected by their irrational behavior, rational behavior and decision making behavior. In this study SEM approach was applied to analyze the data. The observations from the study disclosed that, the hypothesized model has a good fit and indicates that the anticipated model has the adequate fit, by way of satiating the suggested values. The finding indicates that investors are partly rational and partly irrational because they collect complete financial information and use this information for investment decision making and also use short cuts for decision making. 

scholarly journals Perceptions and Behavior of Investors Towards Stock Indices Performances in UAE

2019 ◽  
Vol 8 (2S3) ◽  
pp. 110-115
Keyword(s):  
Decision Making ◽  
Stock Market ◽  
Investment Decision ◽  
Financial Information ◽  
Rational Behavior ◽  
Stock Indices ◽  
Investment Decision Making ◽  
Irrational Behavior ◽  
Decision Making Behavior ◽  
And Behavior

Investors’ behavior and perception towards stock indices performances of the stock market was taken into account for this study. Relevant data was collected from 416 equity investors indulged in the stock market situated in diverse parts of UAE. This research focuses on how the investors’ perceptions regarding stock indices movements of stock markets are affected by their irrational behavior, rational behavior and decision making behavior. In this study SEM approach was applied to analyze the data. The observations from the study disclosed that, the hypothesized model has a good fit and indicates that the anticipated model has the adequate fit, by way of satiating the suggested values. The finding indicates that investors are partly rational and partly irrational because they collect complete financial information and use this information for investment decision making and also use short cuts for decision making.

Investor sentiment antecedents

2019 ◽  
Vol 11 (1) ◽  
pp. 36-54 ◽  
Author(s):  
Ranjan Dasgupta ◽  
Rashmi Singh
Keyword(s):  
Decision Making ◽  
Stock Market ◽  
Emerging Market ◽  
Investment Decision ◽  
Investor Sentiment ◽  
Equation Modeling ◽  
Content Type ◽  
Investment Decision Making ◽  
Retail Investors ◽  
Specific Factors

PurposeThe determinants of investor sentiment based on stock market proxies are found in numbers in empirical studies. However, investor sentiment antecedents developed from primary survey measures by constructing an investor sentiment index (ISI) are not done till date. The purpose of this paper is to fill this research gap by first developing an ISI for the Indian retail investors and then examining the investor-specific, stock market-specific, macroeconomic and policy-specific factors’ individual impact on the investor sentiment.Design/methodology/approachFirst, the authors develop the ISI by using the mean scores of six statements as formulated based on popular direct investor sentiment surveys undertaken throughout the world. Then, the authors employ the structural equation modeling approach on the responses of 576 respondents on 40 statements (representing the index and four study hypotheses) collected in 2016 across the country.FindingsThe results show that investor- and stock market-specific factors are the major antecedents of investor sentiment for these investors. However, interestingly macroeconomic fundamentals and policy-specific factors have no role to play in driving their sentiment to invest in the stock market.Practical implicationsThe major implication of the results is that the Indian retail investors are showing a mixed approach of Bayesian and behavioral finance decision making. So, these implications can guide the investment consultants, regulators, other stakeholders in markets and overwhelmingly the retail investors to introspect their investment decision making across time horizons.Originality/valueThe formulation of ISI in an emerging market context and thereafter examining possible antecedents to influence retail investors in their investment decision making are not done till date. So, the study is unique in its research issue and findings and will have significant implication for the retail investors at least in emerging market contexts.

scholarly journals Factor Influencing Investor’s Decision Making in Indonesia: Moderating the Role of Locus of Control

2020 ◽  
pp. 49-56
Author(s):  
Febria Nalurita ◽  
Farah Margaretha Leon ◽  
Hamdy Hady
Keyword(s):  
Decision Making ◽  
Locus Of Control ◽  
Loss Aversion ◽  
Structural Equation ◽  
Investment Decision ◽  
Equation Modeling ◽  
Investment Decision Making ◽  
Market Factors ◽  
Regret Aversion

This study aims to investigate the effect of loss aversion, regret aversion, and market factors, on investment decision making with the moderating role of locus of control. Data collection is done by distributing questionnaires. The survey was conducted on individual investors in the Indonesia Stock Exchange in Jakarta to obtain a sample of 281. This research uses the Structural Equation Modeling approach. The statistical tool used is LISREL 8.8. This study found that loss aversion, regret aversion, and market factors significantly influence investment decision making. Locus of control plays the role of moderation between loss aversion, regret aversion, market factors, and investment decision making. The novelty in this study reveals the research that needs to be done to encourage investors to make rational decisions and control the required rate of returns through their locus of control. This research helps investors to make decisions logically and rationally with an open mind, high-performance thoughts and positive actions for investment goals that produce positive returns.

scholarly journals The The Impact of Behavioral Aspects on Investment Decision Making

2021 ◽  
Vol 10 (1) ◽  
pp. 15-27
Author(s):  
Ninditya Nareswari ◽  
Alifia Salsabila Balqista ◽  
Nugroho Priyo Negoro
Keyword(s):  
Decision Making ◽  
Structural Equation ◽  
Investment Decision ◽  
Partial Least Square ◽  
Least Square ◽  
Equation Modeling ◽  
Herd Behavior ◽  
Investment Decision Making ◽  
Behavioral Aspects ◽  
The Impact

This study aims to investigate the impact of behavioral aspects (sentiment investor, overconfidence, salience, overreaction, and herd behavior) on investment decision making. The sample contained 413 individual investors—used partial least square structural equation modeling (PLS-SEM) as a data analysis technique. The results showed that sentiment investors, overconfidence, salience, overreaction, and herd behavior positively affect investment decision making. The finding of this study has important implications for the investor to understand themselves to anticipate bias in investment decision making.

scholarly journals Herd Behavior of Investments: An Assessment of Indian Stock Market

2020 ◽  
Author(s):  
AISDL
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Structural Equation ◽  
Cognitive Biases ◽  
Investment Decision ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Herd Behavior ◽  
Investment Performance ◽  
Investment Decision Making

Behavioral finance theorists contradict market efficiency and propose that investment decision making is not always rational. Investors base their decisions on factors in addition to stock fundamentals and such factors include cognitive biases such as loss aversion, herd behavior, regret aversion, price anchoring and the like. This paper makes an attempt to analyze the influence of two major factors – herd behavior and market factors on investment decision making and in turn it's mediating effect on perception of investment performance. Structured questionnaire was used for collecting the sample for study and structural equation modeling was performed. The study presents evidence to ascertain significant influence of both the factors – herd behavior and market – on investment decision making. The mediating effect of investment decision making on perception of investment performance was also observed to be strong and significant.

scholarly journals Does Herding Behaviour and Overconfidence Drive the Investor’s Decision Making During the Covid-19 Pandemic

2021 ◽  
Vol 1 (8) ◽  
pp. 1-16
Author(s):  
Hirdinis M.
Keyword(s):  
Decision Making ◽  
Structural Equation Modeling ◽  
Data Analysis ◽  
Structural Equation ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Herding Behavior ◽  
Investment Decision Making

This study is intended to analyze the effect of herding behavior and overconfidence in encouraging investment decision-making by investors on the Indonesia Stock Exchange in the Jakarta area. The population of this research is investors who invest in investment instruments listed on the Indonesia Stock Exchange in the Jakarta area with an unknown population, and the number of samples in this study is 100 investors. Data analysis in this study used an alternative method of Structural Equation Modeling (SEM) with Wrap PLS 5.0 data processing tools. The findings of this study is herding has a positive and significant effect on investment decisions by investors in the Jakarta area. Overconfidence has a positive and significant effect on investment decisions by investors in the Jakarta area. This means that the increasing herding and overconfidence of investors can drive the investor’s decisions making in the Jakarta area.

Factors influencing investor’s decision making in Pakistan

2018 ◽  
Vol 10 (1) ◽  
pp. 70-87 ◽  
Author(s):  
Muhammad Haroon Rasheed ◽  
Amir Rafique ◽  
Tayyaba Zahid ◽  
Muhammad Waqar Akhtar
Keyword(s):  
Decision Making ◽  
Locus Of Control ◽  
Structural Equation ◽  
Quantitative Research ◽  
Investment Decision ◽  
Equation Modeling ◽  
Individual Investors ◽  
Content Type ◽  
Investment Decision Making ◽  
The Impact

Purpose The purpose of this paper is to look at the impact of two most commonly used heuristics, namely, representative bias and availability bias on investment decision making and to check that either locus of control interact with the said relations through theoretical proposal and then verification through empirical evidence. Design/methodology/approach The study is a quantitative research using a survey questionnaire for its data collection. Data are collected from 227 investors operating at Islamabad, Lahore, and Sargodha in Pakistan and analyzed using structural equation modeling while the interaction effect is analyzed through simple linear regression following the rules set by Baron and Kenny (1986). Findings The results reveal that both of the heuristics under study significantly cause investors to deviate from rational decision making while the locus of control have no significant moderating effect. Originality/value The proposed model provides insight on how the behavioral factors can lead investors to suboptimal decision making. This study is first of its kind to quantify the degree of irrationality caused by these factors. The findings of this study are practically useful for individual investors, investment managers, and also for policy makers.

Behaviour of Individual Investors in Stock Market Trading: Evidence from India

2018 ◽  
Vol 21 (3) ◽  
pp. 818-833 ◽  
Author(s):  
Rajdeep Kumar Raut ◽  
Niladri Das ◽  
Ramkrishna Mishra
Keyword(s):  
Decision Making ◽  
Stock Market ◽  
Financial Market ◽  
Structural Equation ◽  
Investment Decision ◽  
Nationwide Survey ◽  
Individual Investors ◽  
Information Cascades ◽  
Investment Decision Making ◽  
New Research

This study employs structural equation modelling (SEM) for analysing data collected from a nationwide survey with 396 individual investors, for exploring the factors influencing individual investors’ decision-making in the Indian stock market. This study explored the factors that underpin individual investors’ investment decision-making behaviour to find whether the Indian financial market is efficient and investors make rational decisions. The result indicates that the investors are significantly influenced by herding, information cascades, anchoring, representativeness and overconfidence while contagion shows the insignificant result. Concurrently, the study has also provided strong evidence of investors’ irrationality as well as inefficiency of the financial market. The results can be used for the further exploration of trading behaviour of individual investors and foster new research in the context of behavioural finance.

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