A Descriptive Analysis on Effect of Corporate Governance on Investor’s Decision

Purpose: The article studies the impact of internal factors and external factors influencing an investor’s investment decision. Design/Methodology: The information for the study was obtained from secondary sources like journal papers, magazines and books. Findings: Human psychology has an internal role in investing choice, whereas corporate governance is an external influence. Corporate governance plays a major role in the investment decision-making process by revealing all elements of business information, but investors understand the information according to their own assessments and assumptions based on their psychology. As a result, a firm’s transparency hardly impacts in investment decisions, and it only works to a limited extent; the rest of the investment selection process is dominated by human behaviour. However, the firm is transparent, there is no guarantee that the investor will always act rationally when making a choice for investment. Originality/Value: Every investor should make rational decisions about their investments. Therefore, it is an investor’s responsibility to follow the information provided by the firm, although some investors fail to do so. As a result of investor psychology, investors’ investment decisions are beyond the reach of business transparency. The study implies that a behavioural survey will be useful in determining the factor influencing investors’ investing decisions. Type of Paper: Conceptual Paper

Integrated Intellectual Investment Portfolio as an Efficient Instrument to Manage Personal Financial Investment

The redistribution of resources in global stock markets is prevalent: the capital is transferred from one investor to another. Sometimes, earning a substantial return in the stock market seems complicated to implement for an individual investor. Investing contributes to the welfare of society and the wealth of citizens. This is why people should look for efficient ways to invest. Investment should become a natural part of personal finance management in the majority of households. For this reason, an investment model is developed where stocks are selected based only on market intelligence using historical data. The model helps find one or several stocks that generate the highest return on a separate step. Applying this model, experiments were performed with daily data from German, US, and UK stock markets. The possibility of obtaining higher than average returns in these markets has been noticed. In the German market, during the 97-day period, the authors obtained a 1.46 return, which implies a 2.31 annual return: in the USA market, a 2.37 return (7.93 annual return), and in the UK market, a 1.90 return (4.09 annual return). Thus, the proposed investment decision-making system could be an efficient tool for forming a sustainable individual or household portfolio. It can generate higher investment returns for an investor and, moreover, make the market more efficient by applying market intelligence and related historical data.

How to de-bias investment judgements–unpacking bias and possible remedies in a capital investment context

PurposeResearch on biases in investment decision-making is indubitably important; however, studies in this context are relatively scarce. Unpacking bias has received attention in the psychological literature yet very little attention from management accounting research. This bias suggests that the perceived probability that an event will occur generally increases when the event's description is unpacked into a disjunction of subevents. The authors hypothesize that for a capital investment decision context, managers' judgement of the probability of a future event depends on whether the event is described as one packed event or is unpacked into several disjoint subevents. Additionally, the authors propose that altering the format of the description of an event's occurrence from percentage values to relative frequencies reduces unpacking bias.Design/methodology/approachTo test the study’s hypotheses, the authors conducted two experiments based on a 3 × 2 mixed experimental design in which manager participants were asked to estimate the failure probabilities of technical systems in the context of an investment decision.FindingsThe authors provide evidence that unpacking bias occurs in an investment scenario, which can be characterized as a high-stakes decision context. Changing the format in which probabilities are presented from percentage values to relative frequencies significantly reduces the bias.Research limitations/implicationsAdditional instructions did not further reduce unpacking bias.Practical implicationsFor investment decisions under uncertainty, performance indicators in management templates should be presented in relative frequencies to improve managerial decision-making. The fact that the authors could not show an additional effect of instructions in management accounting reports indicates that it is challenging for management accountants to reduce the biased decision-making of managers by “teaching” them through the provision of instructions.Originality/valueThe authors contribute to accounting research by illustrating unpacking bias and by deriving a debiasing mechanism in a capital investment decision context.

Does COVID-19 really make people risk aversion in investment decision-making?

The economic fallout from COVID-19 pandemic changes individuals’ investment perceptions and behaviors in a tremendous way. Consequently, investment decision-making has been affected as people have to adjust to the new environment. This study aims to study whether COVID-19 really make people risk aversion due to the economic slowdown. Our empirical results are analyzed from household finance data in U.S in July 2021. It is found that COVID-19 proximity, income, and occupation are positively associate with risking taking in investment decision-making, while age and family size are not. This study contributes to the newly emerged body of knowledge on post pandemic investment decision-making and risk behavior analysis and provide implications for financial investment institutions.

Pengaruh Faktor Demografi dan Literasi keuangan dengan Behavior Finance dalam Pengambilan Keputusan Investasi

The investment decision-making process is influenced by various factors, including financial literacy and demographic factors. This research examines the impact of demographic factors and financial literacy with behavioral finance as a mediation on investment decision making. This research using structural equation model (SEM) analysis. The result shows that demographic factors through gender, age, education, income, occupation and experience have an influence and cause a specific behavior in investment decision making. Then the financial literacy factor has an influence in reducing negative behavior. Likewise, demographic factors and financial literacy with behavioral finance as a mediation on investment decisions have a positive influence. The existence of behavior that is manages with planning, financial literacy support, and demographic factors owned by individual investors will create an opportunity for market momentum. Which help maximize profit, better investment and portfolio performance, avoid risks, better investment decision, and forming trading strategies.

PENGARUH INTERNET FINANCIAL REPORTING, TINGKAT PENGUNGKAPAN INFORMASI BERBASIS WEBSITE, DAN JUMLAH SAHAM BEREDAR TERHADAP FREKUENSI PERDAGANGAN SAHAM

The objectives of this study are: (1) to prove, test, empirically and analyze the impact of Internet Financial Reporting on Stock Trading Frequency, (2) to prove, test, empirically and analyze the impact of the Website-Based Information Disclosure Level on Stock Trading Frequency, (3) Testing, proving, by empirical means and analyzing the impact of the Number of Outstanding Shares on the Trading Frequency of Shares. This study uses quantitative methods using secondary data taken from the company's website and the IDX through www.idx.co.id in 2016-2018. In this study, we will use data analysis techniques with multiple linear regression with the help of SmartPLS 3.29. The results of this study show that (1) "Internet Financial Reporting" has no effect on Stock Trading Frequency, (2) Website-Based Information Disclosure has no effect on Stock Trading Frequency, (3) Number of Outstanding Shares has no effect on Stock Trading Frequency. The implications of this research are paying attention to financial information in the company that is listed through the website then investors can predict future financial performance and prospects and can make decisions related to investment decision making, by uploading and updating information owned by the company can provide education to the public. users and prosper the company. The high and low level of disclosure of company website information will have a small impact on the impact of disclosure on investor decisions. In addition, taking into account factors other than the number of outstanding shares, such as fundamental factors and stock prices, can attract investors to invest in the company, because basically investors in buying shares must choose liquid shares.

Decision Making in Financial Markets: A Thematic Review and Discussion

Financial decision making is generally characterized by high degree of risk, uncertainty as well as complexity. Decision making in financial markets takes under consideration a stack of factors including personal, technical and situational factors and above all it necessitates an understanding of human instinct on the top of financial skills. In the broad arena of literature, research studies have proposed two primary themes of decision making-one is the rational approach and the another one is irrational or bounded rationality approach. Rational world presupposes being reasonable in every aspect and making unbiased decisions. Irrationality approach contents that investor behaviour is driven by emotions even if they are well informed. This research paper by using the relevant literature in the field of behavioural decision making and investor psychology, provides an overview of these two distinctive academic doctrines, which clears the way-out that how in actual world people undertake their decision making. Furthermore, this research paper reviews how behavioural biases can lead to errors in investment decision making.