Behavioral factors influencing investment decision-making in the Nigerian real estate stock market

Abstract

This paper examines the behavioral factors that influence investment decision-making in the Nigerian property stock market, with a survey of registered stockbrokers with the Nigeria Exchange Group (NGX), to provide information for optimal investment decision-making. The study adopted a direct survey method. Relevant information was obtained from registered Nigerian stockbrokers via a closed-end questionnaire, and their responses were analyzed using principal component factor (PCF), and ordinary least square (OLS) regression analyses. The study confirms the influence of behavioral factors on investment decisions in the real estate stock market. Buying decisions dominate during bull markets, but investors prefer selling decisions when the market is down. Six behavioral principal factors were extracted. Investor responsiveness factor explains the dynamics of investment decisions in the optimistic property stock market, while herd effect factor predicts investors' investment behavior in the pessimistic market. The empirical evidence of emotional trading underscores the importance of behavioral factors in achieving significant property stock market performance and optimal investment decision making in the Nigeria real estate stock market.