Investigating the Effects of Behavioral Factors on Investment Performance in Nigerian Capital Market

Abstract

The study sought to investigate the effect of behavioral factors, including prospects on investment performance in Nigerian capital market using a cross sectional survey design was employed. A sample size of 160 staff was drawn from a population of 225 staff of active stock brokerage firms in Abuja. Data were collected by way of administered questionnaire and the analysis was done using a simple percentage and multiple regression analysis with the aid of SPSS the relationships between the behavioral factors and investment performance. The findings show that that there is a positive significant relationship between prospect factor and investment performance, It is recommended that investors should carefully consider and carry out research before making investment decisions and should not be carried away by their earlier loss for their future investment decisions. Emphasis should be made on probable cognitive errors such as representativeness, hindsight, illusion of control and availability biases and emotional biases such as regret aversion and over optimism. Also, training programs that create investor awareness in terms of the capacity to point out and protect against cognitive errors and emotional biases that lead to bad investment choices should be offered to prospective individual investors.