Determinants of Investment Trading Behaviour in Pakistan

Abstract

This study aims to investigate the individual or retail investors investment behavior to know that individual demographics and financial factors such as gender, age, educational status, income, and investment levels determine their investment trading behavior amongst three domains namely fundamental, market events and personal factors. We have found that demographic characteristic such as marital status does not play any significant role in determining their investment trading behavior. The structured survey is used to collect data through a personal administration of individual investors belonging to PSX and brokerage firm. Further we use ANOVA and multiple regression to analyze the data collected from primary methods. The evidence suggests that retail investors’ self-confidence is function of both expected and unexpected changes in the market and personal factors which shape the retail investors trading behaviors. The self-confidence and portfolio size are positively related which means that over confident individual investors believe that they have great knowledge and skills. This relationship would help them to perform better than others as over confidence leads them to hold big portfolios