Investment Literacy Research Articles

The Legal Problems of Weakness Supervision of Binary Option in Indonesia

This article aims to find out and assess the forms of binary option supervision in Indonesia contained in statutory regulations. This article discusses the legal problems of the weakness of binary option supervision in Indonesia. This research uses normative research methods using primary and secondary legal materials collected using literature studies with a statutory approach.
 This study found that although supervision of commodity futures trading in Indonesia has been carried out by Bappebti, there are still problematic weaknesses in supervising binary option trading which is currently a new trend in Indonesian society. Futures trading in Indonesia is regulated in Law No. 10 of 2011 concerning Commodity Futures Trading. Bappebti's supervision has legal problems, namely in the form of the absence of a special regulation on binary option trading, lack of education for the public, imposition of sanctions that are less strict, and the existence of legal vagueness. Bappebti is expected to have a legal strategy in optimizing binary option supervision in Indonesia in the form of: making strict regulations, socializing to the public about the dangers of illegal investment, increasing financial and investment literacy, and can cooperate with foreign regulators to improve binary option supervision in Indonesia.

Enhancing Investment Acumen through Web-Based Capital Market Seminars: A Case Study in Probolinggo

This study aimed to enhance the understanding of stock investment principles, specifically technical and fundamental analysis, among beginners in the capital market. Using a web seminar format, the research incorporated socialization methods, engaging investment managers as speakers and a diverse audience of students and lecturers from Probolinggo. An interactive question-answer session was employed to gauge the participants' comprehension. The learning outcomes were evaluated via pre- and post-tests, revealing significant improvements in participants' understanding of technical and fundamental analysis for stock investment. The study underscores the effectiveness of web seminars in fostering informed decision-making in the capital market, thereby minimizing the selection of risky stocks. Consequently, this approach could serve as a valuable tool in global financial education and investment literacy efforts.Highlights:
 
 The web seminar effectively fostered investment literacy, highlighting the importance of digital platforms in financial education.
 Participants showed significant improvement in understanding technical and fundamental analysis, underscoring the seminar's impact on investment decision-making skills.
 The study's results imply a minimized selection of risky stocks, hinting at the potential of such educational efforts in enhancing global financial stability.
 
 Keywords: Web Seminar, Stock Investment, Capital Market, Fundamental Analysis, Technical Analysis.
 

Investment Decision Making With Investment Satisfaction As An Intervening Variable: Availability Bias And Financial Literacy

Good investment climate is expected to attract investors to invest their capital with the convenience offered. The role of investor behaviour is very important in the use of the capital market as a place to invest. Rational considerations and emotional aspects also influence investment decision making. Young investors tend to have an aggressive nature that is very influential on making investment decisions. Availability bias is the ease of obtaining information so that investors tend to make investment decisions based on the information that is most quickly obtained. Stock investment literacy for each individual has a different level and will influence decision making as a form of stock investment behaviour. This paper aims to analyse the effect of availability bias and investment literacy on the decision to invest in shares of young investors by using satisfaction as a mediating variable. The respondents of this research are young investors in Surabaya with a sample of 93 respondents and the data is analysed using PLS-SEM. The result of this research are only financial literacy which has a direct effect on investment satisfaction, and investment satisfaction is able to mediate the relationship between financial literacy and investment decision making on investors.

Financial socialization, strength of social ties and investment literacy of investors in peer-to-peer (P2P) lending platforms

This study explores survey data of investors in peer-to-peer (P2P) lending aiming to assess their investment literacy, how this literacy is affected by their financial socialization and the strength of their social ties, and whether this effect differs among investors’ sociodemographic groups. Our research model was built based on Gudmunson and Danes (2011), Gudmunson et al. (2016) and Potrich et al. (2016). It measured investment literacy, assessing three components — knowledge, skills and attitudes; included multiple socialization agents; and investigated both direct and indirect effects of financial socialization. Descriptive and reliability analysis, confirmatory factor analysis (CFA), t-tests, analysis of variance (ANOVA) and second-order structural equation modeling (SEM) analysis were employed. The results indicate that the investment literacy of P2P lending investors is high. The compound direct effect of financial socialization on the overall level of investment literacy was found to be positive and stronger than on its individual components. Although the strength of social ties had a strong influence on financial socialization, its indirect effect on investment literacy was rather weak. Peers proved to be the main socialization agent and exhibited the strongest social ties with the respondents. The strongest effect of financial socialization on the investment literacy was identified for P2P lending investors in 18–34 years group working in the financial sector with a net monthly income below 1500 euros. The research contributes to the existing literature by providing the methodology and valuable insights into the level of financial literacy among P2P investors and how investment literacy is or is not formed under social interaction in a close social environment.

NEW INVESTOR LITERATION PROGRAM SEBAGAI UPAYA PENINGKATAN PENGETAHUAN INVESTASI PASAR MODAL SISWA SMA NEGERI 2 PEMALANG

Investment essentially investing capital with the hope of getting a profit in the future. One of the investment instruments is the capital market. Financial inclusion index data shows that the capital market literacy index in Indonesia is quite low compared to other financial literacy indexes such as banking, insurance, financing institutions and pawnshops. In fact, investing in the capital market is one investment that is quite easy and profitable. In terms of the age of investors, the age range of 15-17 years, which is the age of teenagers, still has a minimal level of capital market investment literacy. This is also experienced by students of SMA Negeri 2 Pemalang who are still new to capital market investment. The New Investor Literacy Program is expected to be able to increase investment understanding so that students can prepare for financial well-being in the future. The method used in this activity is education and training, where SMA Negeri 2 Pemalang students will be given education in advance about the concept of capital market investment, then continue with training on how to practice investing in capital market products in Indonesia. In general, this activity ran smoothly and conducively with the enthusiasm and curiosity of SMA Negeri 2 Pemalang students who were so great in terms of capital market investment.

Effectiveness of an interactive method in teaching investment literacy: Factors determining the return of beginning investors’ portfolios

Introduction. The article examines how certain factors influence the efficiency of forming virtual portfolio of financial assets. The purpose of the article is to identify the factors that contribute to the investment return of beginning investors. Materials and Methods. The methodological basis of the study includes Russian and international research articles devoted to enhancing financial and investment literacy on the national level, the role of financial education in successful investments, and the factors of return estimations for various groups of investors, including young people and beginners. The research was carried out at Novosibirsk State University (the Faculty of Economics). Portfolios produced by 396 students majoring in Economics, Management, and IT Business, who completed the ‘Financial Markets and Financial Institutions’ module were analyzed. The portfolios were completed in 2020, 2021, and 2022. The dependent variable in the econometric model was an investment portfolio return. The main factors considered for this research included students' academic performance, academic year, degree programme, age, gender, and financial asset structure of each portfolio. Results. The review of the scholarly literature allowed to identify the following potential return factors: investment literacy, educational background, personal behaviour characteristics, gender, financial market shocks, and economic crises. It was found that portfolio return is determined by the following factors: economic instability influencing financial markets, students’ academic performance in finance disciplines which is closely connected to their investment literacy and personality features revealed in the portfolio structure. However, age, degree programme and gender did not show any significant influence on the project outcome. Conclusions. Identifying the factors of students’ investment portfolio return enabled the authors to determine further development of the financial course with the interactive method in teaching investing literacy. Taking into consideration economic instability factor significance, it is necessary to discuss financial assets characteristics and dynamics during economic crises. In general, investment literacy increase influences the result positively.

Information-seeking Barriers Encountered by MTN Asonge Shareholders Residing in the Capricorn District, Limpopo, South Africa

Little seems to be known of the information-seeking behaviour of investors. This is despite the fact that investors, in order to determine the risks and opportunities underlying any investment business, are expected to seek information before making an investment decision. Various information behaviour studies have shown that a combination of personal and contextual factors could act as barriers to information. The purpose of this article is to report on a study that explored the information-seeking barriers that black investors in the MTN Asonge Scheme, Capricorn District in Limpopo, South Africa, encounter when they seek information while using electronic resources. A qualitative, phenomenological research approach was followed. Purposive snowball sampling was applied to sample the study respondents, who were later interviewed. Semi-structured, face-to-face interviews were conducted with six investors to collect data, which were subsequently analysed thematically. The findings indicated that the major barriers that affect MTN Asonge investors when using electronic information sources, are of a personal and contextual nature. Personal barriers include a lack of information search skills, inadequate investment literacy and an inability to interpret investment information. The contextual barriers they encountered include internet search costs, poor internet connectivity and a lack of active email accounts. This study significantly adds to the limited existing body of literature on challenges faced by black investors in an everyday life context, particularly in rural settings, when seeking information by using electronic resources.

An empirical study on the relationship between financial literacy and emotional biases

Purpose of the study: This paper aims to establish a relationship between investors’ financial literacy and emotional biases in India. Financial literacy holds tremendous importance for making systematic financial choices and decisions. Today, with ever-rising economic unpredictability, uncertainties, governments and companies pulling out of welfare schemes such as the pension system in India and worldwide bring out the undisputed significance of financial literacy and systematic financial planning. Methodology: A total of 412 responses were obtained for the research study. The research study was carried on using Pearson’s Chi-square test, Cronbach’s alpha, and factor analysis. Findings: It was found through the research that there exists a significant relationship between financial literacy and risk aversion, overconfidence bias. Both genders were equally risk averted. Men are more overconfident than women; there is a relationship between age group and overconfidence bias. Implications: This study holds its significance in finding out the degree of biases and financial literacy of investors in India, and thus with greater accessibility of information and expanding awareness shall ameliorate financial skills, knowledge, and decisions concerning investments. Novelty/Originality of this study: The prevailing studies have studied the relationship between financial literacy and cognitive biases, portfolio selection, retirement plans; the same has not studied the relationship between financial literacy and emotional biases encompassing Affinity bias, Snakebite Effect, and Myopic Loss Aversion of Indian Investors specifically.

Providing education and financial literacy about stock investment planning for SMK PGRI Pandaan students

The potential for capital market investment development in Indonesia is very large. However, the growth in investment interest so far is still very low. Low investment interest in the capital market is caused by several obstacles, including lack of knowledge, information, and low education and literacy about investing in the capital market. The introduction of the right investment should be given to people who have productive age because it is considered a driver of the economy. Educational supplies and investment literacy have the potential to be developed for high school students, which in this service activity are carried out at SMK PGRI Pandaan. The reason is that students are of productive age and can qualify to invest in the capital market. Stock investment education and literacy activities carried out at SMK PGRI Pandaan are considered appropriate because the school's conditions lack facilities and information so the level of knowledge and skills of students related to stock investment is still relatively low. To achieve the target output of the activity, the methods used are lecture, practice, discussion, and question and answer. The training activities are carried out through Zoom Meetings because they are still in a state of the Covid-19 pandemic. This training activity resulted in the achievement of knowledge about stock investment, benefits, and risks as well as skills in how to trade shares.

Literasi Investasi sebagai Upaya untuk Meningkatkan Perilaku Sadar Berinvestasi pada Kelompok Investor Pemula di Kudus

This proposed community service program is designed to provide solutions and assist novice investors in making investments. The basis for proposing this service is the existence of problems, including the limited ability of human resources to obtain investment information and how to manage it, lack of financial literacy, do not have long enough financial goals, and do not have special capital only for investment, experiencing fear to do investment, not confident, and afraid of losing.
 The activities that will be carried out in this service are to provide investment literacy as an effort to increase investment awareness behavior. The objectives to be achieved are: 1) increasing public awareness of the importance of investing 2) increasing the understanding of novice investors about investment instruments 3) beginner investors can choose the right type of investment and 4) beginner investors can apply good investment strategies. The approach offered in the realization of this service is a mentoring model through outreach activities that focus on investment literacy, capital markets, risks, and returns on investment.

Investment Attractiveness of Capital Markets: Trends in De-Shadowing Business Deals

The article considers the issues of de-shadowing of investment agreements on the capital market, in particular, on the stock market of Ukraine. Peculiarities of investing in securities as financial assets and making financial investments with the use of securities are determined. Capital markets can develop as investment-attractive systems. Common schemes of non-transparent investment in the capital market of Ukraine are revealed — the use of securities to avoid taxation or the so-called «tax optimization» of business transactions and withdrawal of capital outside Ukraine; manipulation of the price of stock assets and the use of insider information in securities trading; issue and formation of authorized capital at the expense of technical securities; raider seizure of securities of enterprises with the use of illegal change of owners. The causal factor in the reproduction of the shadowing of capital is the existing economic and organizational and legal reasons that distinguish business in one, on the other — there are such motives as greed, the desire to get rich quick, the accumulation of initial capital by any means. This is the irrational investment behaviour of households and corporations. It has been determined that securities fraud is a common crime in the stock market. Fraud in securities is manifested in criminal offenses and civil law violations of shareholders’ rights. Insufficient efficiency of regulatory institutions to combat the shadow economy is one of the reasons for the spread of the latter. The growing role of state preventive regulation in levelling the risks of shadow capital turnover is revealed and substantiated. It is substantiated that the state, represented by regulatory authorities, should have expanded institutional and instrumental capabilities to prevent risks of financial destabilization. Such opportunities are achieved both by increasing the financial literacy of investors and prudent precautionary regulatory action. Foreign experience of de-shadowing the capital market and combating economic crime is analysed. It is determined that in foreign countries much attention is paid to de-shadowing the economy and combating economic crime. Significant work in this direction is preventive in nature. Thus the system of prevention of fictitious economic activity consists of the following structures: police bodies; specialized law enforcement agencies; tax services; customs services; financial intelligence agencies. Reducing the level of shadowing of the capital market of Ukraine will increase its investment attractiveness. This will have such positive consequences as: increasing the capitalization of professional stock market participants (institutional investors) and increasing their financial stability by increasing the size of authorized capital, increasing the market price of freely traded securities («free-float»); achievement / excess of the actual solvency margin over the previous settlement. Protected and legitimate assets of professional stock market participants will provide investment income on trusted assets at a level not lower than inflation.

Boosting the choice of energy-efficient home appliances: the effectiveness of two types of decision support

ABSTRACT Consumers’ limitations in assessing the lifetime cost of household appliances may sustain the much-cited energy efficiency gap. We analyse the impact of an individual’s energy and investment literacy and two different types of decision support on the ability to identify the appliance with the lower lifetime cost in an online randomized controlled trial among two independently chosen samples of the Swiss population. In a decision task, participants choose between appliances with different lifetime cost. One treatment offers a short education programme on how to calculate the lifetime cost of an appliance – via a set of information slides. The second treatment provides access to an online lifetime-cost calculator tool. We find that pre-treatment energy and investment literacy are positively associated with the probability of identifying the appliance with the lowest lifetime cost. Evidence in this paper suggest that both decision aids boost identification of energy-efficient appliances. We discuss strategies to scale up these boosters.

How do retail investors react to a market crash? The role of investment literacy

ABSTRACT This study investigates retail investors’ behaviour when the US stock market dropped precipitously by 10% in early February 2018. Results show that investors with higher investment literacy were more likely to buy additional stocks and less likely to sell their stocks, which indicates that they expected a quick recovery of the market. We also find that older investors and investors with greater risk aversion were more likely to hold their positions without buying or selling stocks. Similar evidence is found in reactions to a 20% hypothetical market drop. This study sheds light on the meagre literature on retail investors’ behaviour during market crash.

FAKTOR-FAKTOR YANG MEMPENGARUHI TINGKAT FINANCIAL LITERACY INVESTOR DI KOTA DENPASAR PADA BURSA EFEK INDONESIA

This study aims to analyze the effect of education level, gender, income, and marital status simultaneously and partially on the financial literacy level of investors in the capital market in Denpasar City. The research population is the entire community of Denpasar City who invests in the capital market, with a total sample of 100 respondents who were determined based on accidental sampling of a snowball combination. The research method uses primary data (observation, structured interviews, and in-depth interviews). The data analysis technique used was multiple linear regression with those analyzed by the SPSS program. The results showed that, 1) simultaneously the variables of education, gender, income, and marital status had a significant effect on the level of financial literacy of investors in the capital market in Denpasar City; 2) partially education and income variables have a positive and significant effect on the level of financial literacy of investors in the capital market in Denpasar City, the level of financial literacy of capital market investors in Denpasar City, which is male is greater than that of female, and financial level the literacy of capital market investors in Denpasar City who are married is greater than those who are not married.

HOW FEMALE DIFFER IN DECISION MAKING FOR PERSONAL INVESTMENT STRATEGY

Abstract. This study investigates Lithuanian females’ personal investment peculiarities in line with Australia’s case analysis and application as a good practice method. Based on many publicly available research females tend to have less knowledge about finances in general and particularly investment processes; hence, it leads to their lack of interest into investing and the possibility of poor money management. This issue might be solved by investigating why it appears first and adopting the practical example from countries with developed investment market. In the case of comparison of personal investment strategies among Lithuanian and Australian females the two sets of questionnaires have been used to collect the data for further analysis. The main findings revealed by the survey were, that women in Australia had a higher financial literacy level, invested more often, and chose broader variety of investment instruments compared to Lithuanian females. Moreover, the significant discovery of the article disclosed that Lithuanian females chose not to invest due to the lack of additional funds and the shortage of financial knowledge. The main limitation occurred during the research was the lack of the available data on personal investment topic in Lithuania’s official statistic sources such as The Lithuanian Department of Statistics. The results of the research contribute towards improving Lithuanian female personal finance and investment areas and could be applied to further studies or used for the education program dedicated to financial literacy among women in Lithuania creation. Furthermore, this article creates an original value to personal finance, investment, and financial literacy areas in Lithuania by introducing an idea to not only conduct more studies in these fields, but also to use comparative analysis and good practice method from the countries that demonstrates high achievements in personal finance and gender equality areas. Keywords: personal investment management, female investment, financial literacy, investor’s profile, investing, investment options, investment strategies. JEL Classification G51, G53 Formulas: 1; fig.: 5; tabl.: 1; bibl.: 15.

Mobile investment technology adoption among investors

PurposeThe purpose of this study is to examine investors' internal characteristics, including investment literacy, risk tolerance and familiarity with mobile financial services, as antecedents of mobile investment technology adoption among American investors.Design/methodology/approachUsing the 2018 National Financial Capability Study and its supplemental Investor Survey, this study examined antecedents, including investors' internal characteristics, in relation to mobile investment technology adoption. Nested logistic regression analyses were performed for adopting mobile apps for investment decisions and for investment trading.FindingsThis study found that objective and subjective investment knowledge, experience using mobile banking for payments and money transfers, and certain ownerships of investment vehicles (such as whole-life insurance policies and ETFs) were significant determinants of mobile investment decision-making. On the other hand, subjective investment literacy, risk tolerance, familiarity with mobile financial services, and portfolio value, as well as certain types of investment vehicles were significantly associated with mobile investment trading.Originality/valueThis study is among the first to examine investors' investment literacy, risk tolerance and familiarity with mobile financial services as investors' internal characteristics in relation to mobile investment technology adoption. The diffusion of innovations theory and related concepts provide theoretical support for this study. The findings provide new insights into mobile investing as an emerging FinTech subject and provide implications for practitioners and FinTech developers, as well as contribute to the literature of mobile investment service adoption among retail investors.

Research on the Information Spillover Effect of Production Network：From the Perspective of Analysts

As China’s capital market reform enters the deep-water zone, strengthening the role of security analysts is an excellent way to alleviate the contradiction between the sharply increased market specialization level and the backward literacy of investors. At the same time, unilateralism is on the rise, and the Chinese government has set the “domestic circulation” development strategy. In this dual context, this paper mainly discusses how the production network reflecting the domestic circulation affects the accuracy of analysts’ earnings forecasts.Based on the earnings forecast of listed companies released by security analysts during 2007-2018 and industry input-output data, this paper explores the impact of production networks on analysts’ earnings forecasts. It is found that the production network has an information spillover effect on analysts’ earnings forecasts. That is, when the industry of analyst-following companies is closely related in the production network, the deviation of the earnings forecast issued by analyst-following companies is lower. After measuring primary and secondary industries by tracking ratio, it is found that the spillover direction is from primary to secondary. The mitigating effect of production network correlation and its spillover effect on the information asymmetry at the industry and firm levels faced by analysts provide a specific explanation for the reduction of forecast bias. In addition, the cross-sectional analysis based on industrial policy shows that the marginal effect of production network correlation on analysts’ forecasts is more obvious in non-key supporting industries. Further analysis shows that the role of production network correlation analyst is effective, which promotes the integration of specific production network information into stock prices and reduces the synchronization between the firm and the market portfolio. After classifying the information hierarchy, it is found that analysts mainly increase the interpretation intensity of information at the industry level.The marginal contribution of this paper lies in that: It enriches the relevant literature on the quality of analysts’ earnings forecasts from the industry perspective, and highlights the importance of industry correlation that may have been neglected in the early stage. Different from the micro-perspectives of suppliers and customers, this paper extends the information spillover of industrial chain to the multi-dimensional production network, and enriches the research on industry association from the perspective of network. On the practical level, from the perspective of the inter-industry input-output that forms the domestic circulation, the emphasis on the role of production network and analysts is of certain practical significance for improving the efficiency of market information and promoting the professional reform.

Investigating the Effect of Financial Literacy on Investors' Financial Risk Tolerance

The purpose of this paper is to examine the effect of financial literacy on investors' financial risk tolerance among investors of the Tehran Stock Exchange. The research sample that was selected by available methods includes 384 investors of the Tehran Stock Exchange in the first half of 2020. The standard questionnaire of financial literacy and financial risk tolerance of Yaghoubnejad et al. (2011) and Carina & Lisa (2015) has been used to measure the research variables and test hypotheses. The content and face validity methods and factor analysis were used to confirm the validity of the questionnaire and its reliability was evaluated using Cronbach's alpha coefficient. Structural equation and PLS methods have been used to test the research hypotheses. The research hypotheses test results showed that earning money literacy, investment literacy, spending and borrowing literacy and financial risk literacy as components of financial literacy have a positive and significant effect on financial risk tolerance. But savings literacy does not affect financial risk tolerance.

Sharia Investment Literation by Sharia Insurance Agents on Unit-Linked Products

The growth of the Islamic insurance industry in this country can be seen from the increase in existing assets and players. However, the low level of literacy related to sharia insurance as well as how to invest in unit-linked sharia insurance products makes some people hesitant about sharia insurance. Certified sharia insurance agents are at the forefront of providing investment literacy in sharia insurance products to customers since they have been given full trust to manage their assets so that customers get protection and benefits. How the sharia insurance agent at PT. Asuransi Jiwa Generali Indonesia understands Islamic investment will be discussed in depth using a descriptive qualitative method and triangulation techniques in managing the interview results. This study reveals that certain agents also lack product awareness and investment literacy. So that it can be a reference for insurance agent trainers in optimizing training for agents, both directly and through applications, to provide more understanding and make it easier for Generali insurance agents to provide information on unit-linked products to their customers, especially in terms of sharia investment.

Financial instruments – the driving force of the capital market

The article considers the capital market of Kazakhstan, which is interesting for international investors looking for expanded opportunities to make a profit through capital investment. The analysis of the portfolio of companiesresidents of Kazakhstan shows a high closeness to the standards of developed countries. Nevertheless, the country needs serious reforms designed to ensure an increase in the attractiveness of various spheres of investment of finance, transparency and predictability of state policy. There is a pronounced monopoly on demand on the market of investors in Kazakhstan, who are included in the institutional category: there is only one major player, offers are little diversified, IPOs and SPOs are extremely rare. In a crisis situation, the set of financial instruments changes in accordance with the accepted directions and rules of investment. Over the course of a number of crises, traditional low-risk assets have proven the existence of residual investment attractiveness with an average level of return. The situation in the global market is undergoing noticeable changes, including due to the consequences of the pandemic, as well as past crises. In general, the stock market in Kazakhstan should be used to attract both debt financing and equity financing. The active growth of investment retail is hindered by the low investment and financial literacy of the population, and the absence of large-scale IPOs.