The Role of Financial Behavior in Improving Investment Decision: Empirical Evidence of The Students of Economics and Business Faculty UPN “Veteran” Jawa Timur

Delvia Istiana,Dhani Ichsanuddin Nur

doi:10.33005/ebgc.v3i1.100

Delvia Istiana, Dhani Ichsanuddin Nur

Open Access

https://doi.org/10.33005/ebgc.v3i1.100

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Abstract

   Financial behavior can understand the behavior of investors in making investment decisions. Investment decision making is a process of selecting the best alternative from a number of alternatives that are available under the influence of complex situations. Investment decision making is influenced by several factors, namely Anchoring Bias, Loss Aversion, and Overconfidence. The purpose of this research is to examine the contribution of Anchoring Bias, Loss Aversion, and Overconfidence of Active Students in the Faculty of Economics and Business UPN “Veteran” East Java as investors in improving investment decision making. The sampling technique used was purposive sampling with the sample determination technique using the Slovin formula. This study used 99 investor respondents who had invested more than three months and were active students of the Faculty of Economics and Business, UPN "Veteran" East Java. The data collection technique used a questionnaire which was then analyzed using a quantitative descriptive method with the Partial Least Square (PLS) model. The results of this study indicate that Anchoring Bias can contribute to improving investment decision making, Loss Aversion can contribute to improving investment decision making, and Overconfidence can contribute to improving investment decision making  

Highlights

In the era of globalization, the capital market has become an important component in today's economy
The results of this study indicate that Anchoring Bias can contribute to improving investment decision making, Loss Aversion can contribute to improving investment decision making, and Overconfidence can contribute to improving investment decision making
According to research by Alquraan et al, (2016) and Nofsinger (2005: 10) the results show that financial behavior factors such as loss aversion, overconfidence, and risk perception have a significant effect on individual investors' stock decisions on SSM, while herd has a significant effect. not significant

Summary

Introduction

In the era of globalization, the capital market has become an important component in today's economy. The capital market is an activity that is concerned with public offerings and securities trading, public companies related to securities issued, and institutions and professions related to securities. Investment performance is useful for investors because investors always expect high returns or returns, so it is very important for investors to know investment performance. Investors must know and control the biased behavior that will occur because it will have an impact on investment decision making, if investors cannot control financial bias behavior, there will be a problem in making investment decisions which will have an impact on the returns obtained by investors not as expected

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