Individual Stock Investors Research Articles

Choosing a securities brokerage on the stock market: the risk governance perspective

Introduction: The role of a securities company is demonstrated through operations such as brokerage, investment consulting and portfolio management for investors. Therefore, investors' decisions in choosing a securities company affect the profitability and risks of their investment activities. Aim: The research objective is to clarify the factors that determine investors' choice of stock brokers as securities companies in Vietnam's stock market.Methods: The data sample was collected by the author in an online survey from 250 individual and institutional stock investors from January 2023 to December 2023. Conducted through multivariate quantitative regression research method on SPSS 20 software.Results: The article has identified 6 factors that influence the decision to choose a stock broker as a securities company, including: (1) Modern technical facilities, modern core software ( VCCKT); (2) Company size (QMCT); (3) Quality of consulting staff (NVTV); (4) Type of specialized/multi-function securities company (CDDN); (5) Relationship (MQH); (6) Brand marketing (MTMK). Conclusions: Based on the research results, the authors have recommended solutions for securities companies in expanding market share of securities investors such

The influence of technical and fundamental analysis on investment decision making for traders with theory of reasoned action

Financial behavior is intended to understand the behavior of investors in making investment decisions. Decision-making is a process to select the best alternative from available possible alternatives in a complex situation. Decision-making in investments is influenced by knowledge of fundamental analysis, technical analysis, and investor psychology in the capital market. This study aims to determine the behavior of investors in decision-making in investments in the capital market. There were eight informants interviewed in this study from various backgrounds, including brokers, university students, private employees, and investment managers. The result of this study showed the behavior of investors in decision-making in investments in . In making a decision, investors paid less attention to intrinsic value of stocks when stocks are in an uptrend condition and were overconfident in making decisions. Meanwhile, stock investor decisions were quite influenced by fundamental conditions, macroeconomics, and technical stock price fluctuation, so the behavior of individual stock investors in decision-making in tends to be rational.

Financial Investment Behavior of Individual Investors in Indonesia After the Revocation of the Covid-19 Policy

This study explores the impact of psychological, social, and demographic aspects on individual stock investor decision-making after the revocation ofCOVID-19 in Indonesia. With the cooperation of local representatives of the Indonesian Stock Exchange, this study uses data collection approachessuch as sending questionnaires to participants. The questionnaires were sent out between the three weeks of January 2023 after President Joko Widodoannounced the lifting of social restrictions during the pandemic, and then at the end of 2022. In this way, 108 questionnaire responses were thuscollected for the study. The results showed that individual stock investor behavior gender, age, and marital status didn’t affect individual investor'sinvestment behavior. Work, education, and experience positively and significantly impact an individual investor's investment behavior. However, the revocation of social constraints negatively affects this behavior. A study finds education is the most important variable influencing equity investorbehavior.
 Keyword: Behavior; Covid-19; Investors; Individuals.

Is attention-based stock buying profitable? Empirical evidence from Chinese individual investors

We find that a noticeable fraction of investors mainly purchases attention-grabbing stocks. We define investors with such preference as attention-based buyers. Based on Survey data of Chinese individual stock investors, we find that the overall earnings of attention-based buyers decreased by about 4% compared with other investors. Employing two-stage least squares (2SLS) regression we find the OLS regression underestimates the decrease in return. Moreover, attention-based buyers are more susceptible to news and are more inclined to use online-based information as the main reference. Attention-based buyers are more speculative, and demonstrate strong disposition effect. The incapability of investing and loss in return are all attributable to these characteristics. Findings in this article are helpful to the understanding of the typical behavior bias of Chinese individual stock investors.

The impact of behavioural biases on the behaviours of informed and uninformed individual stock investors: the case of the Egyptian Stock Exchange.

The impact of behavioural biases on the behaviours of informed and uninformed individual stock investors: the case of the Egyptian Stock Exchange.

Impact of Contextual Determinants Towards the Disposition Bias of Individual Investors in the Sri Lankan Stock Market

The findings are important for individual stock investors and potential investors significantly; can be attentive to their peculiar cognitive and emotive factors in their accurate investment decisions. Among the 306 individual investors in the Colombo Stock Exchange (CSE) was used as survey model. Through standardized questionnaires from earlier research studies, the events, beliefs, behavioral consequences, loss aversion, disposition, and investor sentiment assessed. AMOS software was used for the structural equation modelling (SEM) analysis of the data. The empirical data supported that loss aversion and investor sentiment positively impacted the disposition bias of individual investors. The events, beliefs and behavioral consequences (emotions) do not considerably drive factors of disposition bias in the Sri Lankan stock market. The results showed that loss aversion and sentiment are the primary causes of disposition bias, which is supported by the previous scholar's findings. The study supported loss aversion through disposition bias and the mediational impact of events. The main theoretical contribution is; the ABC model does not fully support in the Sri Lanka context to address the disposition where the loss aversion contributes to the execution of the disposition and moderating by investor sentiment. The existing outcomes will be useful for the investors, prospective investors and the stockbroker firms for maintaining and leading to substantial assertive decision making reducing of having biased decisions. The study identified the biases of a person's personality about nature in the early structure before leading to disposition bias. The second half of 2020 was used for which statistics were collected, and only the Sri Lankan market was included in the generalization. The macroeconomic implications and the institutional investors do not consider for the study due to complexity. The association between loss aversion and disposition bias was proved via the investigation. The paper recommended that investors with risk-averse prime for the disposition and the disposition is heavily influenced by a person's loss-averse personality, which is controlled by investor sentiment.

Decision Making Behavior of Individual Stock Investors’ in Nepal

The study’s primary objective is to explore the factors influencing the individual investors’ decision making behavior of Nepalese stock investors and to examine the relative degree of influence of such factors with respect to various demographic and socio-economic characteristics. The study follows quantitative approach and exploratory and descriptive research designs. Survey was conducted during March through May, 2021 obtaining 505 usable responses. Factor analysis was performed to explore the influential factors. The factor “Accounting and stock market information” was revealed to be of highest influence in decision making behavior of individual stock investors. The effect of “Public and economic information” was found to be significantly different between male and female investors; surprisingly not among different age groups. “Accounting and stock market information” was found to be significantly different among investors with various educational qualifications. Classical rational criteria such as expected dividends, expected corporate earnings, dividends paid and condition of financial statements were found to be most influential variables. While most respondents seemed to be unaware of the consequences of the contemporary issues like environmental record, increase of firm’s involvement in solving community problems and perceived ethics of firm, the need for relevant awareness and educational campaigns regarding the importance of social, ethical, environmental value of investments seems alarming.

Company Value as Consideration in Making Individual Stock Investment Decisions (Hermeneutical-Critical Study)

Individual stock investor has many options in an investment and investment decision was influenced by so many factors, one of them is value of the firm. Value of the firm is often associated with stock price. The higher stock price means the better value of the firm. This mini-research used critic-hermeneutic research approach. Hermeneutic used for interpretation of text which told by individual stock investors in the interview. There were 8 informant interviewed in this mini-research, who had different backgrounds i.e employee, entrepreneurs, and college students. The result showed that value of the firm as useful value for investors, actually didn’t entirely used by individual stock investors, especially for investors who used technical analysis and another non-fundamental analysis in their stock analysis. Investor’s sophistication in value of the firm analysis also influenced by the other investor, so they didn’t analize it anymore. When value of the firm didn’t influence the investment decision of investor, no-effect hypothesis was applied. Whereas more sophisticated investor considered value of the firm in their investment decision. When value of the firm influenced to the investment decision of investor, mechanistic hypothesis was applied.
 
 Keywords: Individual stock investor, investment decision, value of the firm.

Influence of Stock Brokers on the Investment Decision of Individual Stock Investors

An investor is an important element of the stock market in any economy. In the past, stock investment was limited to the richer class, but in the present day, investment in the stock market is very popular among retail investors. Investment in the stock market is an excellent investment avenue. Many of the investors are non-professional and invest in the stock market based on some degree of recommendation received from others. Naturally, investors feel that they can make a profit from the stock market through professional guidance. Apart from buying and selling shares, the broker offers a range of additional services to investors, such as research reports, advisory services, and relationship managers. They also provide a wide range of products, including IPO, Debt, Mutual Fund, Futures, and Forward contracts, and insurance. Investors depend on the brokers for IPO information, market condition, awareness programs, and training for new investors. The investors received information related to financial services, portfolio selection and gainful information. Investors consider mage and reputation, speed of website and app, annual maintenance charge and initial investment for selecting brokers in the market.

Impact of overconfidence bias in stock trading approach: a study of high net worth individual (HNI) stock investors in India

PurposeThe purpose of the study is to check whether Indian high net worth individual (HNI) investors are suffering from overconfidence bias in personal life and in-stock investment approach. The study is to benchmark an ideal behaviour that an investor should exhibit under the overconfidence bias.Design/methodology/approachBoth qualitative and quantitative methods were used to study the Indian HNI investors with overconfidence bias. As a first step, an exploratory study was conducted to identify the variables to define overconfidence bias. An extensive literature review along with in-depth interviews was conducted amongst investors, fund managers and the subject experts to check the content validity of the variables. The survey instrument was designed based on the objective of the study and theoretical framework. Both descriptive and inferential statistical tools such as the Z proportion test, logistic regression and structural equation model were applied to test the hypotheses.FindingsIt was found that there is a moderate impact of overconfidence bias amongst the investors both in normal life and whilst making investments in stock. This study found the influence of overconfidence bias in stock investment with respect to forecasting of the stock price movements, overtrading, overanalysis and overreaction.Research limitations/implicationsThis paper will help in understanding the Indian HNI investors’ behaviour under the impact of overconfidence bias. There is an empirical study to understand the implication of overconfidence bias on stock investors specifically for the HNI investors.Practical implicationsThis study gives an insight into the fund managers to understand the Indian HNI investment behaviour. It is also helpful for HNI investors to understand and correct their behavioural biases related to overconfidence.Social implicationsThis paper will guide investors to understand the symptoms and repercussions of overconfidence bias in stock investment. They can also realize the subtle impact of overconfidence bias in personal and professional life, thus preventing them from making losses.Originality/valueThis work is the extension of the works of Terrace Odean on behavioural finance in the Indian Stock Investors' context. The concept of overconfidence bias and its implications of finance were developed by Kahneman and Tversky, and later by other behavioural finance researchers such as Malmendier, Hirshleifer, DeBondt, Odean, Barber, Shefrin and others. This paper studies stock investing behaviour with specific reference to Indian HNI investors.

The Impact of Personality Traits on Perceived Investment Performance: The Moderating Role of Social Interaction

Each investor has an investment plan to reach their investment objectives. Perceived investment performance was affected by a high level of the psychological aspect. The purpose of this study was to test the effect of the Big Five personality traits on the perception of investment performance. This study also tests the moderating role of social interaction. PLS-SEM was used to test the hypotheses. Used individual stock investors in Indonesia, the findings showed that openness personality had a negative effect on perceived investment performance. Otherwise, conscientiousness, extraversion, agreeableness, and neuroticism had a positive impact on perceived investment performance. The results also show that social interaction moderates the relationship between conscientiousness, agreeableness, and perceived investment performance. This result shows that information selection and investment knowledge is important when allocating asset to achieve investment objectives.

The term structure effects of individual stock investor sentiment on excess returns

AbstractIn this paper, we construct the individual stock sentiment indexes at daily, weekly and monthly frequencies. We empirically demonstrate the different effects of individual stock sentiment of three frequencies on the excess returns. The results show that the effect of individual stock sentiment on excess returns is a monotonous decreasing function of time term in China's stock market, which presents obvious term structure effect. Moreover, we find that sentiment factor can better explain the variation of excess returns than size factor and book‐to‐market factor do at the same frequency, and thus we should pay more attention to the individual effect of investor sentiment in the short‐term decision‐making. Our results shed new light on the short‐sighted behaviour of irrational investors and the micro‐mechanism of sentiment effect.

Evaluating stock trading behaviour: Information sources nexus through intrinsic and extrinsic motivation

AbstractThis study examines the effects of sources of information, including word‐of‐mouth (WOM) communication, and financial advice, on intrinsic and extrinsic motivations and stock trading behaviour in Pakistan. To test the model, we gathered 477 survey responses from individual stock investors. Our results exhibit that WOM communication and financial advice significantly influence stock trading behaviour. We also find that intrinsic motivations significantly mediate between financial advice and stock trading behaviour. Extrinsic motivations have significant mediation effects between sources of information and stock trading behaviour. Taken together, the results indicate that financial advice indirectly sparks stock trading through intrinsic and extrinsic motivations, whereas WOM communication performs the same function only through extrinsic motivations. The study results have several theoretical and practical implications for investors, stock brokerage firms, regulators, and governments.

Faktor-Faktor Yang Mempengaruhi Pengambilan Keputusan Investasi Saham

: Investment decision making is a complex process that includes analysis of several factors and follows various steps. The purpose of this study is to identify factors that influence investment decision making among potential individual investors in Indonesia. Four behavioral factors can influence investment decision making, namely Financial literacy, financial experience, locus of control and experience regret A set of questionnaires were distributed to 420 individual stock investors to measure their investment decisions. The results of this study indicate that financial literacy, locus of control, and financial experience have a positive relationship with their investment decisions, while the Regret experience has a negative relationship with their investment decisions. This study provides information that can help guide future research and help formulate policy-makers as well as educate on the factors that can influence investors' decisions.

Moderated Mediation: The Impact of Heuristic Representativeness Bias on Investment Decision-Making

The purpose of the existing study is to examine the influence of heuristic representativeness bias (HRB) on investment decision-making (IDM) by moderated mediation of external locus of control (ELC) and risk tolerance (RT) in the Pakistan Stock Exchange (PSX). A convenient sampling technique was used for the collection of research data from 385 individual stock investors. Results reveal that RT mediates the association between HRB and IDM. Besides, this study findings also indicate that the association between HRB and IDM is moderated mediated by ELC and RT. Meanwhile, the study outcomes entitlements that ELC reinforces the effect of HRB on investors' risk-taking proclivity that enable them in investment decisions.

Investor behavior based on personality and company life cycle

Abstract This study aims to ensure that the behavior of individual stock investors has the best pattern in accordance with the existing personality, and see the business cycle starting from introduction, growth, maturity, decline in LQ-45 from the proxy of operational cash flows, investment cash flows, and funding cash flows. This study uses the Analytical Hierarchy Process (AHP) method to see what behavior tends to be used in carrying out shareholding transactions. The results of this study create a behavior model of individual stock investors. Individual stock investors in Indonesia tend to have precision personality types in making stock transaction decisions. This type is a dominant combination, stability, and compliance. The model of individual stock investor behavior starts from making a price target; has a relationship between investors to exchange information related to shares monitored; valuation of shares to be transacted. In addition, the behavior of individual stock investors tends to have accounting information and corporate environmental concerns. Behavioral model Individual stock investors who already have two years or more experience in stock transactions, will have a unique pattern of technical analysis and their own fundamental analysis.

Individual Stock Cash Inflow–Outflow Imbalance, Individual Stock Investor Sentiment and Excess Returns

ABSTRACTBehavioral finance research presents evidence of the importance of “anomaly factors” in the stock market. In this article, we develop an individual stock cash inflow–outflow imbalance index based on individual stock cash inflow and cash outflow and further examine the combined effects of individual stock cash inflow–outflow imbalance and individual stock investor sentiment on excess returns. Our results show that the combined effect of individual stock cash inflow–outflow imbalance and individual stock investor sentiment on excess returns is stronger positive relation. Furthermore, we find that increasing individual stock cash inflow will increase excess returns; on the contrary, increasing individual stock cash outflow will decrease excess returns. Overall, our results highlight the importance of individual stock cash inflow, cash out flow, and cash inflow–outflow imbalance on asset pricing.

The role of stock price synchronicity on the return-sentiment relation

Traditional finance leaves no roles for investor sentiment on account of the efficient information and arbitrage. This paper investigates how information adjusts the individual stock investor sentiment effects on stock prices. We find that the return-sentiment relations on stocks with low stock price synchronicity outperform those with high stock price synchronicity. Moreover, the return-sentiment relations remain positive and significant among stock portfolios doubled-sorted by stock price synchronicity and limit-of-arbitrage variables, which implies that limits of arbitrage worsen information environment and weaken the roles of stock price synchronicity on the return-sentiment relation. Finally, this paper decomposes the individual stock investor sentiment and confirms the roles of the components of individual stock investor sentiment on stock prices. Overall, this paper confirms the roles of individual stock investor sentiment on stock prices.

Does investor personality moderate the relationship between information sources and trading behavior? Evidence from Chinese stock market

PurposeThe purpose of this paper is to investigate the impact of the key sources of information, namely, financial advice, word-of-mouth communication and specialized press, on trading behavior of Chinese stock investors. The study also analyzed if the association between the key sources of information and trading behavior is influenced by investor personality.Design/methodology/approachThe authors adopted the Big Five personality framework and examined the survey results of individual stock investors (n=541) in China. Personality traits of investors were measured by the NEO-Five Factor Inventory (Costa and McCrae, 1989). The authors performed probit regression analysis to evaluate the moderating influence of investor personality traits on the association between sources of information and stock trading behavior.FindingsThe results of the study confirm the previous findings that the key sources of information used by investors as a foundation of their financial choices have a significant influence on their trading behavior. The study also provides empirical evidence that investor personality traits moderate the relationship between the key sources of information and trading behavior. Financial advisors tend to increase the frequency of trading in investors with openness, extraversion, neuroticism and agreeableness personality traits, and tend to decrease the intensity of trading in investors with conscientiousness trait. On the other hand, financial information acquired from word-of-mouth communication is more likely to enhance trading frequency in extraverted and agreeable investors, and is more likely to reduce trading frequency in investors with openness, conscientiousness and neuroticism traits. Finally, the use of specialized press leads to more adjustment in portfolios of the investors with openness and conscientiousness traits than those with other personality traits. An alternative mediated model was not supported.Originality/valueThis research contributes to information search literature and behavioral finance literature and provides empirical evidence that the psychological characteristics of investors are significant predictors of the variations in information-trading link. The study offers new theoretical insights of investors’ behavior due to the characteristics of Chinese stock market which are unique from other stock markets in the world. To the authors’ best knowledge, no previous study has been conducted so far in Chinese stock market to explore variations with regards to the impact of the key sources of information on trading behavior by the Big Five investor personality and this paper seeks to fill this gap.

Individual Investor Behaviour towards Investing in Low and Medium-Risk Investments: An Exploratory Study

The present study is an exploratory attempt to analyse the factors having significant impact on the individual investor preferences for low and medium-risk investments. For aforesaid purpose, the data had been collected through primary survey by framing a questionnaire answered by 607 respondents from three districts of Punjab that is Amritsar, Jalandhar and Ludhiana. Factor analysis and multiple regression analysis had been used to analyse the data. Factor analysis revealed eight factors, that is benefits factor, pocket-friendly factor, credibility factor, friend/family recommendation factor, personal financial needs factor, pre-investment analysis factor, expert advice factor and religious beliefs factor. Findings of multiple regression analysis revealed that benefits factor had highest positive impact on overall preference for low and medium-risk investments. Further, pocketfriendly factor, friend/family recommendation factor, credibility factor, personal financial needs factor and expert advice factor had positive and significant impact on overall preference for low and medium-risk investments. However, pre-investment analysis factor was found to have significant but negative impact on overall preference for low and medium-risk investments. The study helps financial service providers in understanding the various factors that influence individual stock investors of Punjab and the one having significant impact on them to invest in low and medium-risk investments instead of investing in risky investments, and this will provide them implications to financial service providers to design the marketing activities according to the needs of such investors. As no such study has ever been conducted in Punjab, India (to the best of researcher's knowledge), this study potentially helps in abridging gaps in literature.