The Spill-Over of Product Evaluations to Stock Investment Decisions: An Experiment with Finnish Individual Investors

2010 ◽  
Author(s):  
Jaakko Aspara
Keyword(s):  
Investment Decisions ◽  
Individual Investors ◽  
Product Evaluations ◽  
Stock Investment

scholarly journals The intensity of stock selection: A case of young Papuan investors

2019 ◽  
Vol 3 (1) ◽  
pp. 171-178
Author(s):  
Yohanes C. Seralurin ◽  
Yendra
Keyword(s):  
Quantitative Research ◽  
Information Quality ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Positive Influence ◽  
Individual Investors ◽  
Quality Systems ◽  
Stock Selection ◽  
Stock Investment ◽  
Significant Positive Influence

The aim of the current study was to examine and to obtain empirical evidence of the behavior of individual investors in the stock investment decisions. It was quantitative research which applied sampling purposive technique for gaining data. The population of this study was individual investors in Jayapura who were actively investing in the Indonesia Stock Exchange. The results have shown that (1) Information quality systems have got significant positive influence towards the intensity of stock selection; (2) Return influences the intensity of stock selection; and (3) Education has no influence towards the intensity of stock selection.

scholarly journals Stock Investment Decision: The Effects of Personal Factors and Moderating Role of Years of Service

2022 ◽  
Vol 19 ◽  
pp. 107-115
Author(s):  
Tipri Rose Kartika ◽  
Nopriadi Saputra ◽  
David Tjahjana ◽  
Adler Haymans Manurung
Keyword(s):  
Structural Equation ◽  
Investment Decision ◽  
Investment Decisions ◽  
Influential Factors ◽  
Individual Investors ◽  
Personal Factors ◽  
Social Relevance ◽  
Stock Investment ◽  
The Impact ◽  
Moderating Role

This paper aims to elaborate stock investment decision and to examine the impact of five influential factors as independent variables and the influence of years of investment as mediating variable. This paper is based on empirical study which involved 286 individual investors in Indonesia Stock Exchange using data from Riri et.al (2020). Structural equation modelling approach was used for estimating relationship between influential factors (e.g., personal financial needs, overconfidence, advocate recommendation, social relevance, and self or firm image) on stock investment decisions. The result found that decision on stock investment is determined by social relevance, overconfidence, personal financial need, and advocate recommendation significantly and positively. Years of Investment has played moderating role on relationship between for advocate recommendation and personal with stock investment decisions. Years of Investment is moderating variable to become a novelty this paper.

scholarly journals Investor Style in Stock Investment Decisions

2021 ◽  
Author(s):  
Elizabeth Lucky Maretha Sitinjak ◽  
Kristiana Haryanti ◽  
Yohanes Wisnu Djati Sasmito ◽  
Widuri Kurniasari
Keyword(s):  
Investment Decisions ◽  
Stock Investment

Heuristic biases in investment decision-making and perceived market efficiency

2018 ◽  
Vol 10 (1) ◽  
pp. 85-110 ◽  
Author(s):  
Syed Zulfiqar Ali Shah ◽  
Maqsood Ahmad ◽  
Faisal Mahmood
Keyword(s):  
Financial Markets ◽  
Market Efficiency ◽  
Negative Impact ◽  
Investment Decisions ◽  
Sampling Technique ◽  
Investment Strategy ◽  
Individual Investors ◽  
Content Type ◽  
Specific Investment ◽  
The Relationship

Purpose This paper aims to clarify the mechanism by which heuristics influences the investment decisions of individual investors, actively trading on the Pakistan Stock Exchange (PSX), and the perceived efficiency of the market. Most studies focus on well-developed financial markets and very little is known about investors’ behaviour in less developed financial markets or emerging markets. The present study contributes to filling this gap in the literature. Design/methodology/approach Investors’ heuristic biases have been measured using a questionnaire, containing numerous items, including indicators of speculators, investment decisions and perceived market efficiency variables. The sample consists of 143 investors trading on the PSX. A convenient, purposively sampling technique was used for data collection. To examine the relationship between heuristic biases, investment decisions and perceived market efficiency, hypotheses were tested by using correlation and regression analysis. Findings The paper provides empirical insights into the relationship of heuristic biases, investment decisions and perceived market efficiency. The results suggest that heuristic biases (overconfidence, representativeness, availability and anchoring) have a markedly negative impact on investment decisions made by individual investors actively trading on the PSX and on perceived market efficiency. Research limitations/implications The primary limitation of the empirical review is the tiny size of the sample. A larger sample would have given more trustworthy results and could have empowered a more extensive scope of investigation. Practical implications The paper encourages investors to avoid relying on heuristics or their feelings 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 expensive errors, which 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 a more efficient market. So, it is necessary to focus on a specific investment strategy to control “mental mistakes” by investors, due to heuristic biases. Originality/value The current study is the first of its kind, focusing on the link between heuristics, individual investment decisions and perceived market efficiency within the specific context of Pakistan.

Does salience matter in investment decision?

Kybernetes ◽  
2019 ◽  
Vol 48 (8) ◽  
pp. 1894-1912
Author(s):  
Samra Chaudary
Keyword(s):  
Investment Decision ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Individual Investors ◽  
Short Term ◽  
Content Type ◽  
Multigroup Analysis ◽  
Money Managers ◽  
The Impact

Purpose The paper takes a behavioral approach by making use of the prospect theory to unveil the impact of salience on short-term and long-term investment decisions. This paper aims to investigate the group differences for two types of investors’ groups, i.e. individual investors and professional investors. Design/methodology/approach The study uses partial least square-based structural equation modeling technique, measurement invariance test and multigroup analysis test on a unique data set of 277 active equity traders which included professional money managers and individual investors. Findings Results showed that salience has a significant positive impact on both short-term and long-term investment decisions. The impact was almost 1.5 times higher for long-term investment decision as compared to short-term decision. Furthermore, multigroup analysis revealed that the two groups (individual investors and professional investors) were statistically significantly different from each other. Research limitations/implications The study has implications for financial regulators, money managers and individual investors as it was found that individual investors suffer more with salience heuristic and may end up with sub-optimal portfolios due to inefficient diversification. Thus, investors should be cautious in fully relying on salience and avoid such bias to improve investment returns. Practical implications The study concludes with a discussion of policy and regulatory implications on how to minimize salience bias to achieve optimum and diversified portfolios. Originality/value The study has significantly contributed to the growing body of applied behavioral research in the discipline of finance.

scholarly journals Irrational Behaviour and Stock Investment Decision. Does Gender Matter?

2021 ◽  
Vol 11 (2) ◽  
pp. 2185-2204
Author(s):  
M. Siraji ◽  
Na zar ◽  
M.S. Ishar Ali
Keyword(s):  
Risk Perception ◽  
Investment Decision ◽  
Primary Data ◽  
Disposition Effect ◽  
Individual Investors ◽  
Financial Advisors ◽  
Stock Investment ◽  
Irrational Behaviour ◽  
The Individual ◽  
The Right

The research aims to examine the influence of irrational behaviour on stock investment decision, specifically, anchoring, disposition effect, home bias, herding, overconfidence and the risk perception. The research further investigates the moderating role of gender between irrational behaviour and stock investment decision. Finally, it reveals which irrational behaviour is most prevalent. A survey collected the primary data from 425 individual investors. The survey evidence shows that, of six irrational behaviours, anchoring, disposition effect, overconfidence and risk perception were influence the investment decision of individual investors, and risk perception comes out to be the significant irrational behaviour on stock investment decision. It further explores that gender has a significant moderation for anchoring, disposition effect, herding, overconfidence, risk perception, and stock investment decision. We recommend that if individuals are aware of the behavioural biases, it will help them for making the right stock investment decisions. The study also relevant for financial advisors, stockbrokers and policymakers as it facilitates them in gaining a better understanding of their clients’ irrational behaviour. The present study gives a unique insight into the individual investors’ profile of gender corresponding to each main irrational behaviour on investment decision under consideration of stock investment.

International Stock Investment Portfolio Management Strategies for Emerging Economies

2014 ◽  
pp. 368-384
Author(s):  
H. Cem Sayin ◽  
Sinan Çakan
Keyword(s):  
Portfolio Management ◽  
Management Strategies ◽  
Investment Decisions ◽  
Management Process ◽  
Investment Portfolio ◽  
Future Expectations ◽  
Investment Style ◽  
Stock Investment ◽  
The Future ◽  
Stock Investments

People or companies canalize their money to consumption or retain it for the future. Their desire to use their savings to obtain extra income gave birth to the concept of investment. They do this in a frame of expectations about the future. Expectations are the foundation of all investment decisions. This chapter focuses on how an investment and portfolio management process should be and explains different portfolio management strategies. It also includes different types of stock investments. The chapter intends to teach how one can choose a stock and manage money effectively. For this aim, the chapter includes value investment style, growth investment sytle, technical investment style, momentum investment style, fundamental investment style, and beyond. It is very important to know which strategy best fits your aims and your characteristics, so you will be able to learn this through this chapter. In addition, it is important to know how these strategies can used together effectively. In this chapter, an investor will find answers to questions about stock investment.

scholarly journals An Analysis of Behavioral Biases in Investment Decision-Making

2019 ◽  
Vol 10 (4) ◽  
pp. 55 ◽  
Author(s):  
Geetika Madaan ◽  
Sanjeet Singh
Keyword(s):  
Decision Making ◽  
Positive Impact ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Individual Investors ◽  
Behavioral Biases ◽  
Investment Decision Making ◽  
Survey Responses ◽  
The Impact

Individual investor’s behavior is extensively influenced by various biases that highlighted in the growing discipline of behavior finance. Therefore, this study is also one of another effort to assess the impact of behavioral biases in investment decision-making in National Stock Exchange. A questionnaire is designed and through survey responses collected from 243 investors. The present research has applied inferential statistics and descriptive statistics. In the existing study, four behavioral biases have been reviewed namely, overconfidence, anchoring, disposition effect and herding behavior. The results show that overconfidence and herding bias have significant positive impact on investment decision. Overall results conclude that individual investors have limited knowledge and more prone towards making psychological errors. The findings of the study also indicate the existence of these four behavioral biases on individual investment decisions. This study will be helpful to financial intermediaries to advice their clients. Further, study can be elaborated to study other behavioral biases on investment decisions.

scholarly journals How to Measure Financial Literacy?

2020 ◽  
Vol 13 (12) ◽  
pp. 324
Author(s):  
Marc Oliver Rieger
Keyword(s):  
Financial Literacy ◽  
Predictive Power ◽  
Investment Decisions ◽  
Measurement Instruments ◽  
Stock Investment ◽  
Potential Alternative ◽  
Two Measures

Financial (il-)literacy and its effects have been studied extensively in recent years. The measurement of this concept is, however, tricky and numerous measurement instruments exist. In this paper, we study the connection between these measures empirically. We find that these measures are often only slightly related and that this is a so-far overlooked empirical problem in this field. As a result of our analysis, we suggest the combination of two measures as the best potential alternative to the existing measures. Finally, we analyze the predictive power of this suggested measure for stock investment decisions.

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