scholarly journals Influence of Behavioural Biases on Investment Decision Making in Bhubaneswar Region

2019 ◽  
Vol 8 (3) ◽  
pp. 8297-8301
Keyword(s):  
Decision Making ◽  
Investment Decision ◽  
Descriptive Analysis ◽  
Sampling Technique ◽  
Primary Data ◽  
Behavioural Finance ◽  
Investment Decision Making ◽  
Retail Investors ◽  
The Individual ◽  
The Impact

Behavioural Finance has gained a lot more importance in recent era. In the fast moving world where the standard finance fails to explain the irrational behavior of the investors, behavioural finance tries to identify the cause for such behavior which otherwise called as behavioural anomalies. The purpose of this research paper is to identify such anomalies and also to examine whether the behavioural biases has any influence in the investment decision making by the retail investors. This paper also put an emphasis to find out which among the different biases has the most and least influence on the individual investment decision making process. This study has used primary data for knowing the impact of factors such as gender, age, occupation, income, sector preference, and instruments preferred for investments, source of information, intention behind investment and consideration before investment. Descriptive analysis has been done to check the impact of these factors along with correlation and other. The sampling technique used here is non-probabilistic convenience sampling. The data has been collected through structured questionnaire based on five point Likert scale from the retail investors of Bhubaneswar region. This research shall interest the company, policy makers and the issuers of securities about the interest and preferences of individuals before issuing securities in the market.

scholarly journals The Sentimental Influence of Investors on Investment Decision Making

2021 ◽  
Vol 3 (1) ◽  
pp. 85-100
Author(s):  
Shahid Hussain
Keyword(s):  
Decision Making ◽  
Stock Exchange ◽  
Investment Decision ◽  
Sampling Technique ◽  
Primary Data ◽  
Moderator Variable ◽  
Statistical Tool ◽  
Course Of Action ◽  
Investment Decision Making ◽  
The Impact

The study explores the impact of investor’s sentiments on individual investment decision making in the stock exchange of Pakistan. It illustrate a broad range of factors that are usually unseen during the decision making process although the fact that they have a huge influence on their course of action. There are number of factors that are the cause of investor’s overall attitude and sentiments. These factors like religion, overconfidence, affect heuristics, demographic variables etc. Some of these factors impact negatively on an investment decision of an investor but at the same time others could help the investor to make logical and rational decisions. It is an exertion to enhance investors understanding about the factors that could stay away his/her vital investment decisions towards irrational decisions. Primary data is use to conduct the present study. Questionnaire is used to gather data from respondents. Sample size consists of 200 stock investors and brokers from Islamabad Stock Exchange. Convenience sampling technique is used, E-Views is used as statistical tool to test hypothesis. Regression analysis shows that overconfidence, religion has significant relationship with investment decision. While affect heuristics have insignificant relationship with investment decision. Demographic is taken as moderator variable.                                               

Impact of Equity Investment Intention Towards Behaviour: An Empirical Analysis

2021 ◽  
pp. 097226292110043
Author(s):  
Shelly Srivastava ◽  
Supriyo Roy
Keyword(s):  
Decision Making ◽  
Structural Equation ◽  
Investment Decision ◽  
Primary Data ◽  
Risk Propensity ◽  
Equity Investment ◽  
Investment Decision Making ◽  
Retail Investors ◽  
The Impact ◽  
Investment Behaviour

Investments made by investors contribute to both inflow and outflow of funds in the capital market. Investment decision making is complex due to its uncertain behaviour. In literature, there is evidence of a gap between intention and behaviour among other aspects of human behaviour like consumer buying behaviour. Therefore, this study explores the intention–behaviour gap in investment behaviour of retail investors by examining the effect of two moderators, namely risk propensity (RP) and opinion of stakeholders (OPI). The present study also focuses on identifying financial and non-financial factors influencing equity investment intention (EII) and measures its impact on equity investment behaviour (EIB). A model is, thus, conceptualized and hypotheses have been developed accordingly. For validation of the model, a set of primary data of retail investors is collected (through questionnaire framing) and the hypotheses are tested by using advanced statistical techniques, namely structural equation modelling. The outcomes of this study signify the impact of EII that catapults behavioural approach in investment decision making for any potential investor in the near future.

Behavioural biases in investment decision making – a systematic literature review

2015 ◽  
Vol 7 (1) ◽  
pp. 88-108 ◽  
Author(s):  
Satish Kumar ◽  
Nisha Goyal
Keyword(s):  
Decision Making ◽  
Literature Review ◽  
Empirical Research ◽  
Systematic Literature Review ◽  
Investment Decision ◽  
Future Research ◽  
Behavioural Finance ◽  
Content Type ◽  
Investment Decision Making ◽  
The Impact

Purpose – The purpose of this paper is to systematically review the literature published in past 33 years on behavioural biases in investment decision-making. The paper highlights the major gaps in the existing studies on behavioural biases. It also aims to raise specific questions for future research. Design/methodology/approach – We employ systematic literature review (SLR) method in the present study. The prominence of research is assessed by studying the year of publication, journal of publication, country of study, types of statistical method, citation analysis and content analysis on the literature on behavioural biases. The present study is based on 117 selected articles published in peer- review journals between 1980 and 2013. Findings – Much of the existing literature on behavioural biases indicates the limited research in emerging economies in this area, the dominance of secondary data-based empirical research, the lack of empirical research on individuals who exhibit herd behaviour, the focus on equity in home bias, and indecisive empirical findings on herding bias. Research limitations/implications – This study focuses on individuals’ behavioural biases in investment decision-making. Our aim is to analyse the impact of cognitive biases on trading behaviour, volatility, market returns and portfolio selection. Originality/value – The paper covers a considerable period of time (1980-2013). To the best of authors’ knowledge, this study is the first using systematic literature review method in the area of behavioural finance and also the first to examine a combination of four different biases involved in investment decision-making. This paper will be useful to researchers, academicians and those working in the area of behavioural finance in understanding the impact of behavioural biases on investment decision-making.

scholarly journals FAKTOR–FAKTOR YANG MEMPENGARUHI PENGAMBILAN KEPUTUSAN INVESTASI DI PASAR MODAL INDONESIA

2018 ◽  
Author(s):  
Lilis Susilawaty ◽  
Edi Purwanto ◽  
Stela Febrina
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Risk Aversion ◽  
Capital Market ◽  
Investment Decision ◽  
Descriptive Analysis ◽  
Primary Data ◽  
Firm Level ◽  
Quantitative Descriptive Analysis ◽  
Investment Decision Making

<h5><em>The purpose of this research</em><em> to determine what factors affect the return on investment in the Indonesian capital market. By replicating the research conducted by Quershi et al (2012) found 4 (four) factors that influence investment decision making, namely heuristics, risk aversion, financial tools and firm levels of corporate governance. Data analysis technique is quantitative descriptive analysis using primary data with information that is in accordance with respondents who are investors who have invested in the Indonesian capital market. Hypothesis testing is done using multiple analysis by first testing the validity, reliability test, and classical assumption test.</em></h5><h5><em>With a total of 185 respondents, the results of the </em><em>research</em><em> show that heuristics, risk aversion, financial tools and corporate levels of corporate governance together have a significant influence on investment decision making. However, partially, heuristics and risk aversion have no effect on investment decision making, while financial tools and corporate governance levels are significant to investment decision making.</em><em></em></h5><h5><em> </em></h5><p><strong><em>Keywords</em></strong><strong><em>: </em></strong><em>investment decision making, heuristic, risk aversion, financial tools, firm level corporate governance</em></p>

scholarly journals UNCERTAINTY AVOIDANCE, RISK AVOIDANCE AND PERCEIVED RISK: A CULTURAL PERSPECTIVE OF INDIVIDUAL INVESTORS

2019 ◽  
Vol 3 (1) ◽  
pp. 21
Author(s):  
Imran Arshad ◽  
Yusnidah Ibrahim
Keyword(s):  
Decision Making ◽  
Perceived Risk ◽  
Investment Decision ◽  
Uncertainty Avoidance ◽  
Individual Investors ◽  
Risk Avoidance ◽  
Investment Decision Making ◽  
The Individual ◽  
Investment Intentions ◽  
The Impact

Risk serves as an important aspect that can change the decision making of individuals, especially if it is related to investment decision making. The effects of risk on investment decision making have been extensively discussed in the literature but little of it assessed the dominance of various risk-related factors in investment decision making by individuals. In order to make up for this lack,  this research studies the impact of risk avoidance,  uncertainty avoidance and perceived risk on the investment intentions of individual investors in Pakistan and relate it to Hofstede’s cultural dimension. The data was collected from individual investors and after screening, a sample of 548 was found useable for further analysis. Using SEM-PLS, it was found that risk avoidance and uncertainty avoidance significantly influence the investment intention of individual investors. On the other hand perceived risk does not influence the investment intentions of individual investors. In the evaluation of dominating factors, it was found that   risk avoidance is the most significant and the strongest factor that influences the individual investors’ investment intentions. This paper suggests that investment managers should work on strategies to change the risk avoidance behaviour of investors. Moreover, findings suggest that the cultural aspect is more important, and the level of risk avoidance should be kept in mind while offering stocks in the market. The Security Exchange Commission of Pakistan can prepare risk-adjusted products to enhance the level of intentions among the individual investors in Pakistan.

scholarly journals Investment Decisions, Herd Behaviour and Retail Investors

2019 ◽  
Vol 8 (10) ◽  
pp. 3291-3294
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Psychological Factors ◽  
Investment Decisions ◽  
Sampling Technique ◽  
Primary Data ◽  
Individual Investors ◽  
Herd Behavior ◽  
Retail Investors ◽  
The Impact

Behavioral finance explains that cognitive biases influences investor decision making. Due to the influence of different behavioral biases investors do tend to make irrational decisions. Behavioral finance has highlighted the failure of traditional finance theories to account for human emotions when making investment decisions. While traditional finance theories disregard human element in decision-making, behavioral finance theories take into account the human phycology while explaining theories. Many studies have found and explained many biases that are exhibited by investors which lead to irrational investment decision making on their part. One among the many the biases herding can be considered among the most important behavior which leads to low quality investment decisions by investors. While compared to studies about herd behavior of institutional investors, the studies about individual retail investors in less. The motive behind this study is to clarify the role of demographic factors and psychological factors that influence herd behavior among individual investors. In this study the impact of demographics and psychological factors on herd behavior was studied. For this survey, primary data was collected using Judgment sampling technique and the results analyzed. Retail investors in Chennai exhibited herd behavior with regard to investment decisions. Eight factors were found to influence herd behavior.

The Impact of Behavioural Finance on Investment Decision-making: A Study of Selected Investment Banks in Nigeria

2019 ◽  
pp. 097215091985138
Author(s):  
Olubunmi Edward Ogunlusi ◽  
Olalekan Obademi
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Significant Relationship ◽  
Positive Impact ◽  
Investment Decision ◽  
Negative Relationship ◽  
Investment Banks ◽  
Behavioural Finance ◽  
Investment Decision Making ◽  
The Impact

In this study, the impact of behavioural finance on investment decision-making using a selected investment banks was investigated. A total of 200 questionnaire items were administered to the respondents of the four surveyed investment banks including Afrinvest West Africa Limited, Meristem Securities, Vetiva Capital and ARM Nigeria Limited, out of which 180 questionnaire items representing 90 per cent were retrieved. The data were analyzed using tables, percentages, correlation and multiple regression analysis. The overall empirical results provided evidence of a positive impact between behavioural finance and investment decision, supporting previous research and contributing to generalization. The other findings of the research are thus: there is a significant relationship between heuristics and individual investment decision; there is a significant relationship between prospect theory and individual investment decision; and lastly there is a strong and negative relationship between heuristics and investment decision. Similarly, the relationship between prospect theory and investment decision is negative and strong. Against the backdrop of the aforementioned findings and conclusion, the following recommendations are proposed to both the institutional and individual investors: investors should be enlightened on the fact that there are many behavioural factors which can affect their investment decision-making process and they should be made aware of these factors including heuristics and prospect theory.

The impact of an audit committee's independence and competence on investment decision: a study in Bahrain

2020 ◽  
Vol 5 (2) ◽  
pp. 299-313
Author(s):  
Abdullah Al-Hadrami ◽  
Ahmad Rafiki ◽  
Adel Sarea
Keyword(s):  
Decision Making ◽  
Financial Reporting ◽  
Internal Control ◽  
Investment Decision ◽  
Descriptive Analysis ◽  
Listed Companies ◽  
Financial Reports ◽  
Content Type ◽  
Investment Decision Making ◽  
The Impact

PurposeThis study aims to investigate the impact of the audit committee's (AC) independence and competence on the company's investment decision-making in Bahraini-listed companies.Design/methodology/approachA quantitative method is used, and crosssectional data are collected through a self-administered questionnaire survey. A stratified random sample technique is adopted with a total of 409 respondents from 39 listed companies. A descriptive analysis is used to identify the characteristics of the respondents, while the correlation analysis and linear regression analyses are used to test the model and explain the relationship between variables.FindingsIt is found that the AC independence and AC competence have a positive and significant influence on investment decision-making.Originality/valueThe AC’s independence and competence are importantly crucial for the decision-makers in improving the quality of financial reporting, internal control and audit. This may lead to the increase in investors' trust on financial reports and thereby making favorable investment decisions.

scholarly journals Impact of Heuristics on Investment Decisions: The Moderating Role of Locus of Control

2020 ◽  
Vol 5 (1) ◽  
pp. 1-14
Author(s):  
Jeetendra Dangol ◽  
Rashmita Manandhar
Keyword(s):  
Decision Making ◽  
Locus Of Control ◽  
Investment Decision ◽  
Investment Decisions ◽  
Sampling Procedure ◽  
Moderating Effect ◽  
Moderation Effect ◽  
Investment Decision Making ◽  
Overconfidence Bias ◽  
The Impact

This paper aims to assess the impact of heuristics on the investment decision by analysing the effect of four heuristic biases, i.e., representativeness, availability, anchoring and adjustment, and overconfidence bias on rationality of Nepalese investor's investment decision-making and also examines the moderating effect of the internal locus of control in between. The study used 391 respondents based on a convenient sampling procedure, and structured questionnaire survey. The study result indicates that there is a significant relationship between irrationality in investment decision-making and all four heuristic biases. In addition, the study also concludes that locus of control has significant moderating effect in the relationship between investment decisions and three heuristic biases, i.e., availability, representative and anchoring bias. However, the study documents no moderation effect in case of relationship with overconfidence bias.

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