scholarly journals PSYCHOLOGICAL FACTORS AND INVESTMENT DECISIONS IN THE NIGERIA CAPITAL MARKET

2021 ◽  
Vol 6 (1) ◽  
pp. 33-41
Author(s):  
Esther Ikavbo Evbayiro-Osagie ◽  
Michael Ify Chijuka
Keyword(s):  
Decision Making ◽  
Stock Market ◽  
Capital Market ◽  
Psychological Factors ◽  
Investment Decision ◽  
Investment Decisions ◽  
Factors Affecting ◽  
Availability Bias ◽  
Investment Decision Making ◽  
Behavioral Influences

This study examines Behavioral Factors and Investment Decision Making in the Nigerian Stock Exchange (NSE). Thus, the research question is what are the psychological factors affecting investment decisions in the Nigerian capital market. A structured questionnaire was used in collecting data and it was able to collect data from 75 investors with the application of a convenient sampling method. Using overconfidence bias, availability bias, conservatism, and herding effect to define the most important behavioral element affecting investment decision making by investors in the Nigerian. Multiple regression analysis was used as the key methodological method for evaluating the research hypothesis, whereas the internal consistency of the questionnaire calculated from Cronbach's alpha on all variables showed values greater than 0.7 with a sufficient level of reliability. The primary beneficiary group would be the buyers on the stock market who would be educated enough about the effect of their own behavioral influences on their stock market decision making. The knowledge would be useful in making optimal investment decisions and avoiding unfavorable decisions to increase their resources. In turn, it will be helpful to policymakers and stock market regulators to help them understand the position of behavioral influences inherited in consumer decision-making and that may be associated with the need for stock market brokers to update their customer's trading practices to a higher level. The findings of this study suggest that overconfidence, availability bias, and herding impact demonstrated a positive significant relationship with NSE investment decision-making except conservatism which showed a negative relationship with investment decision-making but at 0.01 levels statistically significant. On the basis of the results, it can be generalized that the most prevalent factors affecting investor investment decision taking in NSE are overconfidence, availability bias, and herding influence.

scholarly journals ANALYSIS OF FACTORS THAT ARE CONSIDERED BY INVESTORS IN STOCKS INVESTMENT DECISION MAKING IN BATAM CITY

2021 ◽  
Vol 8 (1) ◽  
Author(s):  
Fendy Cuandra ◽  
Helen Tan
Keyword(s):  
Decision Making ◽  
Locus Of Control ◽  
Data Collection ◽  
Investment Decision ◽  
Investment Decisions ◽  
Availability Bias ◽  
Stock Investment ◽  
Investment Decision Making ◽  
Application Data

Abstract:The purpose of this research is to analyze the factors that investors should consider in stock investment decision making. This research was conducted to assess the interest in investing and consideration when investing which is influenced by representative bias, availability bias, and locus of control. This research was tested using Smart PLS application. Data collection from this study was conducted by distributing questionnaires as many as 353 people in Batam city. Representative bias significantly positively affects investment decision making, availability bias significantly and positively in investment decisions, availability bias moderated locus of control has no effect on investment decision making, and representative bias moderated locus of control has no effect on investment decision making. This research facilitates investors in making investment decisions in Batam city, judging from several factors that influence the decision making helps investors in determining investment and considering every factor that influences Decision making. Abstrak: Tujuan dari penelitian ini adalah untuk menganalisa faktor yang harus dipertimbangkan investor dalam pengambilan keputusan investasi Saham. Penelitian ini dilakukan untuk menilai ketertarikan dalam melakukan investasi dan pertimbangan saat berinvestasi yang dipengaruhi oleh representative bias, availability bias, dan locus of control. Penelitian ini di uji dengan menggunakan aplikasi Smart PLS. Pengumpulan data dari penelitian ini dilakukan dengan cara menyebarkan kuesioner sebanyak 353 orang yang berada kota Batam. Representative bias secara signifikan positif mempengaruhi investment desicion making, availability bias secara signifikan dan positif dalam keputusan investasi, availability bias yang dimoderasi locus of control tidak berpengaruh terhadap investment decision making, dan representative bias yang dimoderasi locus of control tidak berpengaruh terhadap investment decision making. Penelitian ini memberi kemudahan investor dalam mengambil keputusan investasi di kota Batam, dilihat dari beberapa faktor yang mempengaruhi pengambilan keputusan ini membantu para investor dalam menentukan investasi dan mempertimbangkan setiap faktor yang mempengaruhi Decision making.

scholarly journals Impact of Behavioral Factors in Making Investment Decisions and Performance: Evidence from Pakistan Stock Exchange

Market Forces ◽  
2021 ◽  
Vol 16 (1) ◽  
pp. 22
Author(s):  
Muhammad Rehan ◽  
Jahanzaib Alvi ◽  
Lubna Javed ◽  
Baber Saleem
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Individual Investors ◽  
Behavioral Factors ◽  
Factors Affecting ◽  
Investment Decision Making ◽  
The Impact

Market irregularities and irrational behavior triggered investor’s changes in the stock market, and this has led to an investigation into the impact of various behavioral biases and factors affecting decision-making for individual investors. The quality of individual investor behavior in making stock investment decisions is very important to be understood as a reference of the movement of the capital market. This study investigated the role of behavioral finance and investor psychology in investment decision-making at the Pakistan Stock Exchange (PSE). Using a sample of 147 individual investors, the study established that behavioral factors such as Herding, Heuristic, Market and Prospect that affected the decisions of the investors operating at the Pakistan Stock Exchange (PSE). As there are a few studies in Pakistan related to behavioral finance, so this study mainly contributes to the field of behavioral finance in Pakistan. This study focusses on existing theories of behavioral finance which led to develop the hypothesis. The result of the analysis is that the four variables have greatly influenced the investment decision and return on investment. All behavioral variables have a significant impact on the decision-making process of investors, which led to the acceptance of all assumptions regarding the level of influence of behavioral factors in decision making for individual investors

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.

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 Pengaruh Financial Literacy, Representativeness Bias, Dan Bias Optimisme Terhadap Pengambilan Keputusan Investasi

2020 ◽  
Vol 2 (3) ◽  
pp. 2976-2991
Author(s):  
Silvia Putri ◽  
Halmawati Halmawati
Keyword(s):  
Decision Making ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Empirical Evidence ◽  
Financial Literacy ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
State University ◽  
Investment Decision Making

This study aims to analyze 1) whether there is an influence of financial literacy on investment decision maknig. 2) Obtain empirical evidence whether there is an Representativeness bias making on investment decisions. 3) Does Bias optimisme affect investment decision making. In this study using Causality Design. Population and sampek are 104 respondents registered in the Indonesia Stock Exchange Investment Gallery (GIBEI) Faculty of Economics, State University of Padang. The method of analysis is multiple linear regression. The results of the study found 1) Financial literacy influences investment decisions on investment decision making.2) Optimum bias affects investment decisions on investment decision making. 3) Representativness influences investment decisions on investment decision making. 4) Together financial literacy variables, the optimum bias and representativness together influence the investment decision on investment decision making

scholarly journals ASSESSMENT OF THE ROLE OF ACCOUNTING INFORMATION ON EFFECTIVE INVESTMENT DECISION - THE CASE OF BANQUE POPULAIRE DU RWANDA ATLASMARA

2021 ◽  
Vol 6 (3) ◽  
Author(s):  
James Hodari
Keyword(s):  
Decision Making ◽  
Data Collection ◽  
Investment Decision ◽  
Accounting Information ◽  
Investment Decisions ◽  
Target Population ◽  
Staff Members ◽  
Investment Decision Making ◽  
Secondary Methods

The purpose of this study is to assess the role of accounting information on effective investment decisions at Banque Populaire du Rwanda Atlasmara. The target population was 50 staff members. The study used a primary method that involved questionnaires. Secondary methods of data collection involved a desk review of relevant materials. Data collection was then analyzed by using SPSS software. The study indicated a significant correlation between accounting information and investment decisions and all rely on information for an investment decision. It was seen from the analysis of responses, 83% argued always use accounting information for investment. It was revealed that the quality of accounting information in terms of its accuracy, adequacy, reliability, and mode of disclosure is a pertinent element of efficiency of investment decision making. The study recommends that commercial banks should use accounting always to increase the accuracy of their investment decision-making. The study recommends that Banque Populaire du Rwanda should consult the accounting information before making investment decisions and all interested parties to accounting information should use necessary financial ratios analysis for an investment decision. The study concludes that there is a significant correlation between accounting information and investment decision. JEL: M10; M41; R42 <p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0845/a.php" alt="Hit counter" /></p>

Role of personal values in investment decisions

2016 ◽  
Vol 39 (8) ◽  
pp. 940-964 ◽  
Author(s):  
Otuo Serebour Agyemang ◽  
Abraham Ansong
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Quantitative Methods ◽  
Investment Decision ◽  
Personal Values ◽  
Investment Decisions ◽  
Content Type ◽  
Investment Decision Making ◽  
Recent Emergence ◽  
Decision Making Processes

Purpose This paper aims to examine the role personal values play in investment decision-making processes among Ghanaian shareholders. Design/methodology/approach In consequence of the recent emergence of the issue of corporate governance practices in Ghana, and the kind of the research objective of this paper, a mix of qualitative and quantitative methods was used. These methods were used in two stages. The first stage was qualitative, which purposively selected 20 individual shareholders to solicit their perspectives on how personal values influence investment decisions. Their responses were used to construct the content of this enquiry. The second stage, which was quantitative, used stratified sampling technique to select 503 individual shareholders to confirm the responses obtained from stage one of the enquiry. Findings The findings of the study reveal that individual shareholders in Ghana hold value priorities and that honesty, a comfortable life and family security play a significant role in their lives and their investment decision-making processes, and the kind of companies they choose to invest in. Also, to Ghanaian individual shareholders, there is a clear distinction between a comfortable life and a prosperous life in the sense that they are not incentivized more by the latter but by the former in their investment decisions. Practical implications The results can inform corporate directors and managers what values are considered in investment decisions, and that it is not purely financial. With these results, they can be informed that while some financial values are important, it is just to live a comfortable life and not a prosperous life. This may influence these directors and managers to have a more long-run focus and to have more of a corporate social responsibility (CSR) focus by putting implementable measures in place to tackle corporate responsibility issues and to take up a responsibility for their CSR feat. Also, the results can be used for public policy in that if regulators find out that more CSR-type information is important to investors, they might require additional CSR-type disclosures in financial statements. Originality/value This paper contributes to the knowledge on the stakeholder perspective of corporate governance that individual shareholders’ personal values have influence on their investment decisions and the choice of companies they invest in.

Analyzing Manufacturer’s R&D Equilibrium in Defense Procurement

2011 ◽  
Vol 474-476 ◽  
pp. 1435-1439
Author(s):  
Sheng Li Chen ◽  
Xiao Dong Liu
Keyword(s):  
Game Theory ◽  
Decision Making ◽  
Investment Decision ◽  
Investment Decisions ◽  
Defense Procurement ◽  
Contest Theory ◽  
Investment Decision Making ◽  
Admission Criterion ◽  
The Government ◽  
D Investment

We formulate the model of R&D investment scale adjustment of defense procurement by applying game theory and contest theory and study the equilibrium of manufacturers’ R&D investment decision-making in defense procurement. We explore mainly the influence of valuation of monopolistic contract and differences among manufacturers’ abilities on investment. The conclusion shows that manufacturers’ investment equilibrium of R&D projects is what the government expects under certain conditions, however, manufacturers’ abilities effect on the investment equilibrium and makes it deviate from the government expectation. Therefore, the government must keep practically manufacturers’ anticipation about the monopolistic contact being consistent with government’s and set basic admission criterion to enable manufactures’ ability well-matched to induce the manufacturers’ investment decisions to the investment equilibrium that it desired.

Effect of Disposition Effect on Investment Decision Making in Property Market in Plateau State, Nigeria

2019 ◽  
pp. 83-98
Author(s):  
Dashol Ishaya Usman ◽  
Mary Pam
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Investment Decision ◽  
Investment Decisions ◽  
Primary Data ◽  
Property Market ◽  
Financial Decisions ◽  
Descriptive Research ◽  
Investment Decision Making ◽  
Plateau State

The purpose of the chapter was to establish the effect of disposition on investment decision making in property market in Plateau State, Nigeria. Descriptive research design was used in the study. Primary data was collected using standard questionnaires with both closed and open-ended questions. The regression analysis results confirmed that there was a significant positive linear relationship between disposition and investor investment decision making in property market in Plateau State in Nigeria. The study concluded that disposition effects bias does not alter rationality in investment decision making. Disposition affected investment decisions. The main recommendation for investors is to make constant attempts to increase their awareness on behavioral finance by educating themselves on the field. Studying about the biases and reflecting on their decisions are likely to help achieve better self-understanding of the extent and manner to which they are influenced by emotions while making financial decisions under uncertainty.

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