Affect Investment Decisions Research Articles

Challenges in Millennials Investment Decision: A Study of Behavioural Biases

Aims: This research aimed to analyze the effect of Cognitive Dissonance Bias, Overconfidence Bias, Herding Bias, Endowment Bias, and Confirmation Bias on the investment decisions of the millennial generation in the capital market. Study Design: The sampling method used in this study was purposive sampling, which obtained 128 respondents. Place and Duration of Study: The research was conducted with investors in Banyumas Regency. Methodology: This research method uses the SEM (Structural Equation Modeling) analysis method with the Partial Least Square (PLS) approach. Each hypothesis is tested to understand the relationship between variables. To test the validity and reliability of research using an outer model. Hypothesis testing uses inner models. Results: The results of this study showed that cognitive dissonance bias, overconfidence bias, and endowment bias have an effect on investment decisions. However, herding bias and confirmation bias do not affect investment decisions. Conclusion: To increase investment opportunities, investors must pay attention to cognitive dissonance bias, overconfidence bias, and endowment bias because they can cause investment failure. Investors must also pay attention to information circulating in the media because analysis needs the latest information on investment transaction targets to avoid investment failure.

The Influence of Islamic Financial Literacy, Islamic Financial Inclusion, and Financial Behavior on the Investment Decisions of Generation Z in West Java

The largest number of Generation Z in Indonesia has potential for economic development. This is because the younger generation possesses high levels of technological skills, making them promising investors and key drivers in advancing investment growth in Indonesia. This research aims to analyze the levels of Islamic financial literacy and inclusion and their influence on financial behavior and investment decisions using descriptive analysis and the SEM-PLS method. The research results indicate that the average level of Islamic financial literacy was 77.9% (well-literate) and the level of Islamic inclusion was 80.5% (high). Islamic financial literacy and Islamic financial inclusion significantly affect investment decisions while financial behavior does not significantly affect investment decisions. This study contribute to enhance the index of literacy and financial inclusion in sharia finance for the younger generation, as well as promoting participation in sustainable investments oriented towards sharia principles.

Impact of Behavioural Biasness on Investment Decision Making Process

Behavioral finance attempts to investigate the psychological and sociological issues that Influence investment decision making process of individual and institutions. It also considers how various psychological traits affect how individuals or groups act as investors, analysts, and portfolio manager. The study investigated the effects of behavioral factors on investment decisions making by unit trust companies in Kenya. Literature has documented that individual and even institutional investors have embraced heuristics in their investment decision making. The study therefore sought to establish whether heuristics (overconfidence behavior, herd behavior, and anchoring behavior) affect investment decisions in unit trusts. Descriptive design study was used through questionnaire survey of two hundred and eleven individuals. Semi structured questionnaire was used for data collection with 100% response rate being registered. Analysis was done using Statistical Packages for Social Scientists. Descriptive statistics and correlation analysis were used to summarize the research findings. The study established that unit trusts' investment decisions are affected by overconfidence, availability, and anchoring behaviors. Unit trust managers tend to be overconfident while making investment decisions. Their decisions are also affected by experience of their past performance suggesting the effect of anchoring. According to the findings, managers who are overconfident are also likely to follow the masses in decision making. Behavioral finance models are not empirically supported and therefore should not be used in isolation for investment analysis by unit trusts. Investors on the other hand should be aware of the fact that fund managers are not immune from behavioral biases while making investment decisions. They should therefore closely monitor their investments' performance and actions of fund manager to ensure that these biases are eliminated.

Computational dynamics of information ratios

The information ratio is one of the most important measures when choosing among investment funds. We show numerically and analytically that the classic single-index definition of this performance measure suffers from a computational defect which unfavorably affects investment decisions by singling out exceptionally good funds. Specifically, we highlight that high positive fund returns, which are in the best interest of the investors, can lead to suboptimal and even negative changes of the information ratio. Furthermore, we formally prove that fund managers have an incentive to target specific medium-sized returns because they generate the highest possible information ratio.

Impact of Behavioral Biases on Investors’ Stock Trading Decisions: A Comprehensive Quantitative Analysis

Objective: This paper aims to investigate the impact of specified behavioral biases on investors' stock trading decisions in North India. It has been observed that most of the research works are based on financial theories, which affect investment decisions. But besides the theories nowadays, behavioral biases also play an important role in investment decisions, which was less focused in the previous literature. Methods: The study used primary data collected from a sample from North Indian States (Uttar Pradesh, Delhi, Haryana, and Punjab) through a structured questionnaire to analyze the impact of specified behavioral biases on investors' stock trading decisions. We used structural equation modelling to find out the significant impact of behavioral biases on stock trading and investment decisions. Findings: The investigation determined that the majority of the designated cognitive biases, such as the Overconfidence Bias, the Representativeness Bias, and the Herding Bias, exert a significant influence on the decisions about stock trading and investment made by investors. Novelty: The ample research in this domain has primarily occurred in various countries, with only a limited number of studies conducted specifically at the Indian level. Nevertheless, based on the literature review, it is evident that this study is groundbreaking in North India. The objective of this research is to enhance the effectiveness of financial advisors by gaining a deeper understanding of the psychological aspects of clients. This, in turn, will aid in developing portfolios tailored to individual behavior, aligning with client preferences. Recognizing and addressing behavioral biases is crucial for individual investors as they strive to make informed and successful financial decisions. Keywords: Behavioral Biases, Overconfidence (OC) bias, Representativeness Bias (RB), Herding Bias (HB), Structural Equation Modelling

Ethno-religious Conflict in Kaduna, Nigeria: Perceptual implications for Residential Property Development

This study investigates the causes of ethno-religious conflicts prevalence in Kaduna and its attendant influence on residential property development decisions in Kaduna, Nigeria. Data was collected through structured questionnaires and administered by trained Assistants to residential property owners/investors in selected neighbourhoods of Kaduna North and Kaduna South. A total of 5,439 questionnaires were administered to respondents (Property Owners/Investors) and 3,431 was retrieved. This includes 1,608 from Kaduna North and 1,823 from Kaduna South representing a total of 63.08% response rate. Quantitative data obtained from the questionnaires were analysed using descriptive statistics and logistic regression. The findings indicate that in Kaduna North, the incessant ethno-religious conflicts in the area, resulted to problems associated with low occupancy ratio occasioned which is a consequence of voids in many completed residential properties in the area, negatively affected investment decisions (B = 1.275, p = 0.049). In Kaduna South, the incessant conflicts in the area resulted to more significant problems which negatively affected residential property investment decisions including property loss due to violent attacks (B = -1.102, p < 0.001), limited access to financing (B = -3.392, p < 0.001), overall insecurity in the location (B = -1.816, p < 0.001), low property demand (B = 9.269, p < 0.001), and challenges with disposal and attracting quality tenants/occupants/buyers (B = -7.029, p < 0.001). The study recommends the need for strengthened security measures, improved access to financing, peace-building initiatives, infrastructure development, market support and capacity building. These findings provide valuable insights for policymakers and stakeholders in residential property development ventures in developing targeted strategies to promote sustainable residential property development in Kaduna.

THE INFLUENCE OF INCOME AND FINANCIAL LITERACY ON INVESTMENT DECISION THROUGH FINANCIAL BEHAVIOR AS A MODERATING VARIABLE

This study aims to discover the influence of income and financial literacy on investment decisions through financial behavior as a moderating variable for Bank Nagari Muara Labuh Branch customers. The sample in this study were customers of Bank Nagari with a total of 100 samples. The data analysis method uses moderated regression analysis The results are based on the research and hypothesis testing that has been done, the results of the study can obtain that income has a positive and significant effect on Investment Decisions at Bank Nagari Muara Labuh Branch. Financial Literacy positively and significantly affects Investment Decisions at Bank Nagari Muara Labuh Branch. Income positively and significantly affects Investment Decisions through Financial Behavior at Bank Nagari Muara Labuh Branch. Financial Literacy positively and significantly affects Financial Behavior Decisions at Bank Nagari Muara Labuh Branch. This research contributes to financial institutions to create policies to improve customer investment decisions. For the government, this research contributes to making policies in setting regional minimum wages Keywords: Income, Financial Literacy, Investment Decisions, Financial Behavior

Problems of ESG that Prevent Its Integration in Investment Decision-Making: Evidence from Investors

The growing importance of ESG considerations in investment decisions reflects a transformative shift in how investors evaluate the sustainability and ethical impact of firms. As ESG integration becomes increasingly popular among investo rs, it is important to analyze how such an integration can affect investment decisions. While previous articles discussed reasons why investors integrate or not integrate ESG in making investment decisions, they did not probe into the question of how problems of ESG itself affect its integration in investment decision-making. This essay explores this topic by analyzing previous articles about ESG, its traits, and investors’ views on taking into account ESG factors in investment decision-making. It is concluded that some problems of ESG, including the absence of agreed criteria and lack of transparency in the rating process, can prevent ESG integration from being effective in making investment decisions.

Peran Financial Literacy dan Overconfidence dalam Pengambilan Keputusan Investasi: Suatu Tinjauan Kuantitatif

This research aims to explore the impact of Financial Literacy and Overconfidence on investment decisions among students of the Faculty of Economics and Business, Universitas Pamulang. Utilizing a quantitative method, data was collected from respondents who participated in the Capital Market School. The analysis revealed that individually, Financial Literacy and Overconfidence do not exert a significant influence on investment decisions. However, when examined together, they collectively yield a significant effect. The Regression Analysis results indicate that Financial Literacy does not exhibit a significant partial effect on investment decisions. Similarly, Overconfidence does not demonstrate a substantial partial impact on investment decisions. Nevertheless, when analyzed collectively, both factors influence the investment decisions of students.This study emphasizes the importance of strong financial literacy as a key aspect in making informed investment decisions, albeit without significant individual impact. Conversely, Overconfidence, representing excessive confidence in one's abilities or knowledge, does not directly impact investment decisions on a partial basis. However, jointly, both factors significantly influence investment decision-making. These findings provide a basis for financial education within higher education to further emphasize enhancing financial literacy and awareness of Overconfidence in personal financial management and investment decision-making. Subsequent research could consider additional factors that may affect investment decisions and broaden the scope to different respondent groups or more complex investment scenarios.

Determinants of financing decisions for renewable energy projects: A case study

Renewable energy sources have never been more affordable and are now significantly undercutting fossil fuels as the world’s cheapest source of energy. Otherwise, it can benefit the environment, economy and society in the long term. However, financing and investment barriers play an important role in order to encourage renewable energy projects in Vietnam. In this research study on factors affecting investment decisions in renewable energy, along with behavioural and institutional theories, the authors have pointed out that financing decisions (FD) for energy projects in Vietnam are also influenced by non-financial factors. In this paper, we developed the model by using four factors: a priori beliefs (PB), institutional influence from legal obligations (IO), institutional influence from normative sources (IN), and knowledge of renewable energy operational context (KC). Structural equation modelling (SEM) is used to analyze determinants of the decision-making of financial institutions. Similar to Giang (2022), our result shows the important role of the PB in the effectiveness of renewable energy’s existing policies and technological adequacy, KC as well as the IN in renewable energy FD of institutional investors. Meanwhile, IO does not impact the investors’ willingness to finance renewable energy projects.

Examining interrelationship amid behavioural biases affecting investment decisions - using DEMATEL approach

Examining interrelationship amid behavioural biases affecting investment decisions - using DEMATEL approach

PERAMALAN HARGA SAHAM NVIDIA DENGAN METODE DOUBLE MOVING AVERAGE

The movement of NVIDIA's stock price greatly affects investment decisions, so accurate forecasting is very important to influence investment decisions. This research will apply the data mining process for forecasting NVIDIA stock prices using the Double Moving Average method with the application of order 2 and order 3 models. The purpose of this study is to determine the forecasting of the NVIDIA stock price index based on historical data. The results show that stock price forecasting using the Double Moving Average method order 2 model is more accurate and in accordance with actual or actual results. On the other hand, forecasting the Double Moving Average method with the order 3 model produces unsatisfactory forecasts that can be used, making it less suitable for dynamic markets. Therefore, the results of forecasting NVIDIA stock prices using the Double Moving Average method order 2 obtained an accuracy of 98% compared to order 3 of 67%. Based on the comparison results of using orders 2 and 3, it can be an important factor for investors to help make investment decisions in terms of forecasting the next production of NVIDIA shares.

Analysis and Prediction of Financial Stock Risk Value Based On Improved FAST-ICA Algorithm and GARCH Model

This study focuses on improving the FAST-ICA algorithm and GARCH model to more accurately analyze and predict the value at risk of financial stocks. Accurately measuring stock risk is crucial for investors and securities managers in today's financial markets, as it directly affects investment decisions and risk control. We have improved the FAST-ICA algorithm and proposed the TS-ICA algorithm, aiming to improve the separation performance and iteration efficiency of the algorithm. And we combine the TNA method for data preprocessing to eliminate noise and improve the robustness and prediction accuracy of the model. In terms of GARCH model, we constructed the TS-ICA-GARCH model using the independent decomposition results of the TS-ICA algorithm to more accurately predict the volatility and value at risk (VaR) of stocks. Through empirical analysis and backtesting, we have verified the superiority of the TS-ICA-GARCH model in measuring risk, especially in extreme market conditions with stronger coping ability. This study provides a more reliable risk assessment tool for financial market participants, which helps to develop more effective investment strategies and risk management measures.

Does Social Media Sentiments Affect Investment Decisions A Moderated Mediation Analysis of the Relationship among Social Media Sentiments, trust, and Investment Decision

Does Social Media Sentiments Affect Investment Decisions A Moderated Mediation Analysis of the Relationship among Social Media Sentiments, trust, and Investment Decision

What factors affecting investment decision? The moderating role of fintech self-efficacy.

This study aims to determine, from the perspective of investors, the factors that predict Islamic unit trust (IUT) investment intentions. Additionally, this paper examines the moderating effect of fintech self-efficacy (FSE) on the relationship between attitude and investment intention. A total of 392 data were collected from IUT investors in Malaysia and analyzed using partial least squares structural equation modeling. The findings reveal that subjective norms have the highest impact on investment intention, followed by attitude and FSE, while religiosity is not significantly associated with investment intention in Islamic unit trust funds. Attitude significantly mediates religiosity-intention and Islamic financial literacy-intention relationships. FSE significantly moderates the attitude-intention relationship. The results shed light on the key factors that increase investing behavior and have direct managerial implications with regard to marketing strategies and target markets. These findings suggest that IUT service providers should take the lead in attracting customers through effective and targeted marketing initiatives, particularly by enhancing customers' FSE and capabilities. This study provides empirical evidence on the interrelationships between Islamic financial literacy, religiosity, and FSE in examining investors' behavior using the Theory of Planned Behavior framework. The study explores the moderating role of FSE on the relationship between attitude and investment intention.

Short-Selling on Corporate Investment: Korean Evidence

Purpose: Prior studies suggest that an informative stock price helps corporate investment decisions. Since short-selling improves the informativeness of stock prices, short-selling could influence corporate investment. This study examines this conjecture.
 Design/methodology/approach: Using KOSPI-listed firm data, this study examines whether short-selling affects quantitative aspects, that is, amount, and qualitative aspects, that is, risks and profitability, of R&D or capital expenditure.
 Findings: The results show a distinct contrast between the two types of investment. After short-selling, a decrease in R&D investment i s observed; however, capital e xpenditure i ncreases i n firms that i nvest much i n capital expenditure. A post-short-selling increase in R&D increases firm risk, but capital expenditure does not. Post-shortselling R&D investment is tied to long-term profitability; however, except for large firms, capital expenditure does not contribute to the increase in long-term profitability.
 Research limitations/implications: This study provides supporting evidence that improved informativeness of stock prices improves investment efficiency, not only through R&D investment but also through capital expenditure. However, by examining the topic in the big picture, this study leaves out the influence of several factors that can affect investment decisions.
 Originality/value: This is one of the rare studies that examines the real impact of short-selling.

경영자 과신성향과 ESG등급이 투자효율성에 미치는 영향

I would like to examine how management and overconfidence caused by ESG activities, which are issues among recent management techniques, affect investment decisions made by managers with strong overconfidence tendencies. This study analyzed whether CEO overconfidence affects investment efficiency according to ESG ratings. Overconfidence was measured based on the research of Schrand and Zechman(2012) and Ahmed and Duellman(2013), and investment efficiency was measured based on the research of Biddle et al.(2009). The study period is from 2013 to 2022, and the total number of samples is 6,298, and the results are as follows.
 First, overconfidence has a positive effect on investment efficiency, which means that the stronger the overconfidence tendency, the more inefficient it appears in investment efficiency.
 Second, ESG ratings have a negative effect on investment efficiency, which means that the higher the ESG rating, the more efficient the company's investment appears.
 Third, it was confirmed that overconfidence is alleviating investment inefficiency caused by overinvestment due to the high ESG rating. Companies with high ESG ratings have found that investment inefficiencies are mitigated even though managers have a strong tendency to over-line.
 This study is expected to contribute to prior research by analyzing the impact of overconfidence propensity on investment efficiency according to ESG ratings and providing evidence that it may vary depending on detailed grades.

Initial Public Offering (IPO) and Factors Influencing Investment Decision: Evidence from Dhangadhi

This study examines the initial public offering (IPO) and factors influencing investment decisions: evidence from Dhangadhi on the prospectus review, academic qualification, and experience. Prospect Theory and the Information Processing Perspective are discussed to understand the psychological biases and information processing capabilities that influence investors in IPOs. Data was collected through a survey of 200 respondents to investigate these factors empirically. The results of the study indicate significant relationships between the variables. The correlation analysis reveals strong positive correlations between the review of the prospectus and investment decision, as well as experience and investment decision. The correlation between academic qualification and investment decisions was positive but relatively weak. Furthermore, the regression analysis confirms the influence of these factors on investment decisions. The regression results demonstrate that reviewing a prospectus, academic qualification, and experience significantly affects investment decisions in IPOs. A higher review of a prospectus, educational qualifications, and experience are associated with more favorable investment decisions. The findings of this study have important implications for investors, financial professionals, and policymakers. Future research could consider a more extensive and diverse sample and investigate additional factors influencing IPO investment decisions.

Prospect Driven Biases Affecting Investment Decision Making: Mediating By Risk Perception And Moderating By Robo-Advisory

Prospect Driven Biases Affecting Investment Decision Making: Mediating By Risk Perception And Moderating By Robo-Advisory

Influential Factors Shaping Investor Decision-Making in the Nepalese Stock Market

The study investigates factors influencing investors' decision-making in the Nepalese stock market. It uses a research design with primary data collected through a questionnaire. The study focuses on financial performance, brokers' recommendations, and informal information as key factors affecting investment decisions. The findings suggest that most investors analyze the market condition and prioritize financial performance, while informal sources have a weaker correlation. Some investors still rely on rumors for their decisions. The study contributes valuable insights to investor behavior and decision-making in the Nepalese stock market.