All are interesting to invest, I fear of missing out (FOMO): a comparative study among self-employed and salaried investors

Abstract

PurposeThis paper aims to examine how fear of missing out (FOMO) and investment intention mediate the relationship between behavioral biases and investment decisions of retail investors in the Indian stock market.Design/methodology/approachThe present research comprises two cross-sectional quantitative studies, where Study A involves data from 405 self-employed and Study B involves 393 salaried investors. Data was attained through questionnaires – the partial least squares structural equation modeling was used for data analysis.FindingsThe outcomes show that herding, overconfidence and loss aversion bias significantly impact investment intention and FOMO on both studies. Furthermore, the outcomes also indicate that herding and loss aversion bias significantly influence investment decisions in studies (A and B); however, overconfidence bias insignificantly affects the investment decisions in Study A. Besides, the results also reveal a substantial relationship between FOMO, investment intention and investment decision.Practical implicationsThe findings of this paper assist practitioners (financial analysts and retail investors) in considering the various ways of analyzing investment decision outcomes by considering the joint effect of several biases.Originality/valueThis paper is an initial attempt to propose a new theoretical framework and empirically examine the impact of behavioral biases on investment decisions by considering the FOMO and investment intention among self-employed and salaried investors. This study also contributes to the behavioral finance literature; other researchers may find it valuable to attain their goals.