scholarly journals Role of Emotions on Individual Investors in Investment Decisions (A Case of Indian Capital Market of Bareilly City)

2017 ◽  
Vol 6 (2) ◽  
pp. 24-38
Author(s):  
Ashish Kumar Saxena ◽  
Rakesh Kumar Yadav
Keyword(s):  
Capital Market ◽  
Investment Decisions ◽  
Individual Investors

scholarly journals Factors Influencing Investment Decisions in Capital Market: a Study of Individual Investors in Nigeria

2013 ◽  
Vol 4 (1) ◽  
pp. 141-161 ◽  
Author(s):  
Tomola Marshal Obamuyi
Keyword(s):  
Influencing Factors ◽  
Capital Market ◽  
Investment Decisions ◽  
Individual Investors ◽  
Past Performance ◽  
Test Analysis ◽  
Factors Influencing ◽  
Leadership Crisis ◽  
Corporate Earnings ◽  
Post Hoc

The study seeks to determine the main factors influencing investment decisions of investors and how these factors are related to the investors’ socio-economic characteristics in the Nigerian Capital Market. The study covers individual investors using convenient sampling method to obtain information from 297 respondents through a modified questionnaire developed by Al-Tamimi (2005). Independent t- test, Analysis of variance (ANOVA) and post hoc tests were employed. The results indicate that the five most influencing factors on investment decisions of investors in Nigeria are past performance of the company’s stock, expected stock split/capital increases/bonus, dividend policy, expected corporate earnings and get-rich-quick. Also, the five least influencing factors include religions, rumors, loyalty to the company’s products/services, opinions of members of the family and expected losses in other investments. The study finds that the socio-economic characteristics of investors (age, gender, marital status and educational qualifications) statistically and significantly influenced the investment decisions of investors in Nigeria. With regard to the past performance of the company’s stock as an assessing factor, groups of investors statistically differed in factor assessment, as segments of a group considered the factor as the most important/unimportant. Since the identified most influencing factors are usually classified as wealth maximising factors, the study recommends that the investment climate and the market environment be made friendly and conducive to attract investors by creatively developing programmes and policies that impact on investors’ decisions in order to maximise the value of the firms and enhance the wealth of the investors. The market players should re-organise the market and implement accommodating policies which will eliminate fraud and resolve the leadership crisis in the market.

scholarly journals Investor Behavior In Islamic Capital Markets: Study On Muslim Students

2021 ◽  
Vol 18 (3) ◽  
pp. 45-60
Author(s):  
Irton Irton ◽  
Salihah Khairawati ◽  
Mu’tashim Billah Murtadlo
Keyword(s):  
Capital Markets ◽  
Capital Market ◽  
Investment Decisions ◽  
Investor Behavior ◽  
Primary Data ◽  
Risk Averse ◽  
Muslim Student ◽  
Risk Taker ◽  
Risk Seeker

ABSTRACTThe purpose of this research is to know the behavior of investors towards Islamic capital market. The research was conducted on several Muslim student respondents from several universities in Yogyakarta who invested in sharia capital markets. The type of data in this study is primary data obtained through in-depth interviews. The results showed that there are two investor characters among students namely risk seeker or risk taker and risk-averse. Respondents realized that investing in the capital market has potential benefits as well as potential risks. For investors, risk seeker has high confidence and optimism when making investment decisions, while risk-averse tends to be cautious and a lot of consideration when making investment decisions. In general, sharia capital market investors who are the majority of students have a good belief in the wisdom of stocks traded in sharia capital markets. They believe in the fatwa of scholars, the role of the DSN, and the role of capital market supervisory bodies. They are mostly also looking for information about sharia capital market sharia through books, capital market socialization, IDX web. In terms of transaction mechanisms in the sharia capital market only a small part still doubts its validity due to issue factors, lack of understanding of islamic capital market the correctness factor of the company's financial performance, and the ups and downs of the share price.Keywords: investor behavior, investment decisions, sharia capital market ABSTRAK Tujuan penelitian ini adalah untuk mengetahui perilaku investor terhadap pasar modal syariah. Penelitian dilakukan terhadap sejumlah responden mahasiswa muslim dari beberapa perguruan tinggi di Yogyakarta yang melakukan investasi di pasar modal syariah. Jenis data dalam penelitian ini adalah data primer yang diperoleh melalui wawancara Hasil penelitian menunjukkan bahwa terdapat dua karakter investor di kalangan mahasiswa yakni risk seeker atau risk taker dan risk averse. Responden menyadari bahwa investasi di pasar modal memiliki potensi untung dan juga potensi resiko. Bagi investor risk seeker memiliki rasa percaya diri yang tinggi dan optimis ketika mengambil keputusan investasi, sedangkan risk averse cenderung berhati-hati dan banyak pertimbangan ketika mengambil keputusan investasi. Secara umum investor pasar modal syariah yang merupakan mahasiswa mayoritas memiliki keyakinan yang baik mengenai kesyariahan saham-saham yang diperdagangkan di pasar modal syariah. Mereka percaya terhadap fatwa ulama, peranan DSN dan peranan badan pengawas pasar modal. Mereka sebagian besar juga mencari informasi tentang kesyariahan pasar modal syariah melalui buku, sosialisasi pasar modal, web IDX. Pada aspek mekanisme transaski pada pasar modal syariah hanya sebagian kecil yang masih meragukan kesyariahannya, karena faktor isu dan kurangnya pemahaman, faktor adanya unsur ketidakpastian naik turunnya harga saham.Kata kunci : perilaku investor, keputusan investasi, pasar modal syariah

The impact of heuristic biases on investors’ investment decision in Pakistan stock market: moderating role of long term orientation

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Imran Khan ◽  
Mustafa Afeef ◽  
Shahid Jan ◽  
Anjum Ihsan
Keyword(s):  
Stock Market ◽  
Investment Decision ◽  
Investment Decisions ◽  
Moderating Effect ◽  
Individual Investors ◽  
Content Type ◽  
Availability Bias ◽  
Moderating Role

Purpose The purpose of this paper is to investigate the effect of heuristic biases, namely, availability bias and representativeness bias on investors’ investment decisions in the Pakistan stock exchange, as well as the moderating role of long-term orientation. Design/methodology/approach Using a structured questionnaire, a total of 374 responses have been collected from individual investors trading in PSX. The relationship was tested by applying the partial least square structural equation model using SmartPLS 3.2.2. Further, Henseler and Chin’s (2010) product indicator approach for moderation analysis was applied to the data set. Findings The results revealed that availability bias and representativeness bias have a significant and positive influence on the investment decisions of investors. Furthermore, a significant moderating effect of long term orientation on the effect of representativeness bias on investment decision is observed. This suggests that investors’ long term orientation weaken the effect of representativeness bias on investment decision. However, no significant moderating effect was observed for availability bias. Originality/value The paper provides novel insights on the role of heuristic-driven biases on the investment decisions of individual investors in the stock market. Particularly, it enhanced the understanding of behavioral aspects of investment decision-making in an emerging market.

Overconfidence heuristic-driven bias in investment decision-making and performance: mediating effects of risk perception and moderating effects of financial literacy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maqsood Ahmad ◽  
Syed Zulfiqar Ali Shah
Keyword(s):  
Decision Making ◽  
Risk Perception ◽  
Financial Literacy ◽  
Investment Decision ◽  
Investment Decisions ◽  
Individual Investors ◽  
Content Type ◽  
Investment Decision Making ◽  
And Performance

PurposeThis paper aims to show how overconfidence influences the decisions and performance of individual investors trading on the Pakistan Stock Exchange (PSX), with the mediating role of risk perception and moderating role of financial literacy.Design/methodology/approachThe deductive approach was used, as the research is based on the theoretical framework of behavioural finance. A questionnaire and cross-sectional design were employed for data collection from the sample of 183 individual investors trading on the PSX. Hypotheses were tested through correlation and regression analysis. The Baron and Kenny method was used to test the mediation effect of risk perception and the moderation effect of financial literacy. The results of mediation and moderation were also authenticated through the PROCESS and structural equation modelling (SEM) technique.FindingsThe results suggest that risk perception fully mediates the relationships between the overconfidence heuristic on the one hand, and investment decisions and performance on the other. At the same time, financial literacy appears to moderate these relationships. The results suggest that overconfidence can impair the quality of investment decisions and performance, while financial literacy and risk perception can improve their quality.Practical implicationsThe paper encourages investors to base decisions on their financial capability and experience levels and to avoid relying on heuristics or their sentiments when making investments. It provides awareness and understanding of heuristic biases in investment management, which could be very useful for decision makers and professionals in financial institutions, such as portfolio managers and traders in commercial banks, investment banks and mutual funds. This paper helps investors to select better investment tools and avoid repeating the expensive errors that occur due to heuristic biases. They can improve their performance by recognizing their biases and errors of judgment, to which we are all prone, resulting in better investment decisions and a more efficient market. The paper also highlights the importance on relying on professional knowledge, giving it greater weight than feelings and biases.Originality/valueThe current study is the first to focus on links between overconfidence, financial literacy, risk perception and individual investors' decisions and performance. This article enhanced the understanding of the role that heuristic-driven bias plays in the investment management, and more importantly, it went some way towards enhancing understanding of behavioural aspects and their influence on the investment decision-making and performance in an emerging market. It also adds to the literature in the area of behavioural finance specifically the role of heuristics in investment strategies; this field is in its initial stage, even in developed countries, while, in developing countries, little work has been done.

Role of financial and non-financial information in determining individual investor investment decision: a signaling perspective

2020 ◽  
Vol 9 (2) ◽  
pp. 261-278
Author(s):  
Muhammad Naveed ◽  
Shoaib Ali ◽  
Kamran Iqbal ◽  
Muhammad Khalid Sohail
Keyword(s):  
Corporate Reputation ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Individual Investors ◽  
Content Type ◽  
Nonfinancial Information ◽  
Mediating Role ◽  
Proposed Model

PurposeThe purpose of this study is to examine the role of financial and nonfinancial information in determining individual investor's investment decisions by analyzing the mediating effect of corporate reputation.Design/methodology/approachThe approach of this study is deductive; therefore, the quantitative strategy is used for data collection. Primary data are collected from individual investors actively involved in stock trading at Pakistan Stock Exchange (PSX). Structural equation modeling is used to assess structural relationships.FindingsThe key findings of this study posit that financial and nonfinancial information positively influence an individual investor's investment decision. This study also provides empirical evidence confirming the mediating role of corporate reputation. Categorically, the findings indicate that financial and nonfinancial information remain significant to build perceived corporate reputation and influence investor's investment decisions.Practical implicationshe proposed model presents novel insight into the individual investor's investment decision in the context of Pakistan. The findings of this study remain robust for firms listed on the stock exchange and individual investors involved in stock trading. The results of this study are substantial to individual investor's and broker for making informed financial choices. Moreover, the firms listed on the PSX can use the findings to establish improved corporate reputation through reporting detailed financial and nonfinancial information.Originality/valueStudies based on subjective measures in finance are lacking. This study contributes to the existing literature of behavioral finance by analyzing variations in investor's investment decisions explained by informational factors. The proposed model testifies the mediating role of corporate reputation in guiding investor's investment decisions, which has been overlooked by past studies. Therefore, this study seeks to fill this gap in the context of the PSX.

scholarly journals CAPITAL MARKET LITERACY AND STUDENTS INVESTMENT DECISIONS

2020 ◽  
Vol 4 (2) ◽  
pp. 200-205
Author(s):  
Gusni Tanjung ◽  
Siti Komariah ◽  
Syamsu Yusuf
Keyword(s):  
Capital Market ◽  
Investment Decisions ◽  
Increasing Trend ◽  
Preliminary Research ◽  
The Right ◽  
Unit Analysis ◽  
The Capital Market

Capital market literacy is presents to give knowledge and experience to students as young investors with no experience in capital market investment products and transactions. The purpose of this research is to find out the role of capital market literacy to encourage students in making the right investment decisions. The unit analysis of this research was an active student of Widyatama University who has followed capital market school and become investors in the Indonesia capital market. This is preliminary research that only using simple statistical descriptive techniques about the number of students investors and their transaction values. The results showed that capital market literacy through capital market schools has an important role in increasing student investment interest and investment decisions which are reflected in the increasing trend of student investors and the value of their transactions in the capital market.

scholarly journals nvestigating the Effects of Behavioral Factors on Investment Performance in Nigerian Capital Market

2017 ◽  
Vol 7 (3) ◽  
pp. 65-82
Author(s):  
Umar Abbas Ibrahim ◽  
◽  
Fareedah Faruk Umar ◽  
Keyword(s):  
Capital Market ◽  
Survey Design ◽  
Investment Decisions ◽  
Individual Investors ◽  
Cognitive Errors ◽  
Behavioral Factors ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Investment Performance ◽  
Brokerage Firms

The study sought to investigate the effect of behavioral factors, including prospects on investment performance in Nigerian capital market using a cross sectional survey design was employed. A sample size of 160 staff was drawn from a population of 225 staff of active stock brokerage firms in Abuja. Data were collected by way of administered questionnaire and the analysis was done using a simple percentage and multiple regression analysis with the aid of SPSS the relationships between the behavioral factors and investment performance. The findings show that that there is a positive significant relationship between prospect factor and investment performance, It is recommended that investors should carefully consider and carry out research before making investment decisions and should not be carried away by their earlier loss for their future investment decisions. Emphasis should be made on probable cognitive errors such as representativeness, hindsight, illusion of control and availability biases and emotional biases such as regret aversion and over optimism. Also, training programs that create investor awareness in terms of the capacity to point out and protect against cognitive errors and emotional biases that lead to bad investment choices should be offered to prospective individual investors

scholarly journals Determinants of Investment Decisions on the Capital Market

e-Finanse ◽  
2018 ◽  
Vol 14 (2) ◽  
pp. 1-8
Author(s):  
Magdalena Jasiniak
Keyword(s):  
Personality Traits ◽  
Capital Market ◽  
Capital Investment ◽  
Investment Decisions ◽  
Nationwide Survey ◽  
Individual Characteristics ◽  
Unit Price ◽  
Individual Investors ◽  
Psychological Determinants ◽  
The Capital Market

AbstractThe article deals with the psychological determinants of investment decisions made by an individual investor on the capital market. The purpose of this article is to try to assess the relationship between capital involvement and selected personality traits and how individuals perceive investments in securities of different nominal unit price. The author attempts to verify whether specific price thresholds affect respondents in a similar way as prices of goods and services to customers, in the context of capital investment. The results of the nationwide survey of 564 individual investors are based on analyses using the model of the willingness to invest in shares with a specific nominal value compared to the individual characteristics of the respondents. The results of the study indicate a significant relationship between personality traits and the tendency to choose stocks with relatively low or very high denomination (current transaction price).

scholarly journals Investment Decision of PTKIN Academic Community in Central Java and Yogyakarta in the Online Trading System

2020 ◽  
Vol 8 (2) ◽  
pp. 313
Author(s):  
Imanda Firmantyas Putri Pertiwi ◽  
Abdurrohman Kasdi
Keyword(s):  
Capital Market ◽  
Financial Literacy ◽  
Investment Decisions ◽  
Academic Community ◽  
Partial Least Square ◽  
Trading System ◽  
Central Java ◽  
Online Trading ◽  
The Capital Market

<p><em>This research aims to predict the effect of financial literacy, ease of entry into the capital market and the role of university to academic community’s investment decisions on the online trading system. This empirical research was carried out by taking academic community of State Islamic University (PTKIN) in Central Java and Yogyakarta as the subjects of the research. The novelty of this research is the formulation of indicators of ease of entry to the capital market and the role of university, which are formulated through not only literature review, but also field observations. Using Partial Least Square (PLS) as the analysis tools, this research finds that financial literacy and ease of entry are being able to predict the influence the academic community's investment decisions. Role of universities variable, although it is empirically proven that four PTKIN samples have been maximized, can not been able to influence the investment decisions of the academic community.</em></p>

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