Investment Decisions Of Investors Research Articles

The Effect of Herding Behavior on Investment Decision: Moderating Effect of Over-Confidence

The main objective of the present study is to investigate the relationship between herding behavior (HB) and investor investment decision (ID). A questionnaire adapted from past research was used to gather data from 400 SME investors in Khyber Pakhtunkhwa, Pakistan. The researcher manually collected data using a random sample approach, developing a cross-sectional survey questionnaire for the study. Using SPSS V-24, regression analysis showed that herding behaviour affects SME investor investment decisions, confirming the study's hypotheses and providing insight into Pakistani SME investors' investment decisions. The reliability statistics showed that all the variables are reliable. Herding behavior, overconfidence, and investment decisions are positively and significantly correlated. The regression model shows that herding behaviour affects investors' investing investment decisions. HB and ID are moderated by overconfidence. Moreover, this type of study is carried out utilizing cross-sectional data. This information can only reveal the full impact that an indicator variable has on a certain model variable at a given moment. Hence, it is recommended that longitudinal research be carried out instead in order to get more significant insights from the participants.

A Study of the Implementation of PSAK 74 on Firm's Value of Insurance Companies in Indonesia

Firm’s value plays an important role for both company management and investors in investment decisions. Often, net profit or revenue is closely related to the creation of firm’s value. This research examines whether the application of the Pernyataan Standar Akuntansi Keuangan (PSAK) or Indonesian Financial Accounting Standards Board 74 affects company value as measured using Tobin’s Q. Standards for insurance company contracts have changed based on the adoption of IFRS 17, and are still being prepared and conducted in-depth studies. This research uses a quantitative approach with panel data regression testing using STATA. Data was collected in the form of secondary data on insurance companies listed on the Indonesia Stock Exchange from 2012 to 2022, using a purposive sampling method. The results of the research show that operational profit (loss) from the new face of insurance company financial reports has a positive effect, while insurance company investment profit (loss) has a negative effect on company value. This research expands the study of the implications of implementing PSAK 74 for insurance companies in the future.

Behavioral Biases in Investment: Overconfidence, Disposition Effect, and Herding Behavior

This section introduces the research by outlining the importance of understanding behavioral biases in investment decisions, particularly within the context of retail investors in Pakistan. This research work primarily intends to find out the influence of behavioral biases over investors' investment decisions. The population of this research are individual investors investing in Pakistan Stock Exchange. The research design of this study is quantitative. The sample size of current research was 400 individual investors. The survey assessed several types of biases, including overconfidence, disposition effect, and herding behavior. The result outcome indicated that with an increased number of such biases present, it significantly influences the investment decisions of investors. This study specifically indicates that respondents are often subject to overconfidence, the disposition effect, and herding behavior, and finally the factors that lead to relatively poor investment decisions. These results underline the identification and need for tackling these biases within the financial decision-making domain. Financial professionals, comprising advisors and educators, are better placed with skills on how to design strategies that deter more adverse consequences of these biases. They can enhance investment quality in decision-making by well-directed training programs and advisory services. Therefore, this study underscores the pivotal role that behavioral finance plays in improving investor outcomes and calls for the rectification of behavioral bias to attain more informed and rational investment decisions.

VALUE RELEVANCE OF SUSTAINABILITY REPORTING BY NON-FINANCIAL LISTED FIRMS IN NIGERIA

The Nigerian Exchange Group (NGX) issued Sustainability Reporting Guidelines in 2018 which requires that listed firms provide sustainability report, in their annual reports or as a standalone report, from 2019. The purpose is to provide additional information to assist investors in investment decisions. This study investigated the value relevance of sustainability reporting by non-financial listed firms on NGX from 2016 to 2020. All the 97 non-financial listed firms on NGX form the population for the study and sample consists of 30 most capitalised firms, proportionally selected from the 7 sectors of the non-financial firms on NGX. Content analysis and panel least square was used as methods of data analysis. Results show that sustainability reporting quantity disclosure has an insignificant negative effect (-0.01) on share price, while sustainability quality disclosure has an insignificant positive effect (0.07) on share price. It was recommended that the regulatory authorities, the Nigerian Financial Reporting Council and the NGX in addition to making sustainability reporting mandatory should enforce the assurance of the report by qualified professionals. Keywords: Agency theory, Information asymmetry, Legitimacy, Signaling theory, Sustainability reporting quality, Sustainability reporting quantity, Value relevance.

PENGARUH UMUR, GENDER, KEAKTIFAN, EXPERTISE FINANCE DAN MASA JABATAN KOMITE AUDIT TERHADAP MANAJEMEN LABA

Financial report information is a basic reference for making investment decisions for investors and shareholders. The profit achieved by a company is often a measure in assessing a company's performance. This shows that the existence of profits in financial statements is very important so that supervision over its presentation is needed to avoid earnings management behavior by management, which can obscure financial information to make it less appropriate to current developments. One effort that can be made is to make changes in the management of business entities by having an audit sub-organization division or known as an audit committee as part of improving company control. In this research, testing the existence of an audit committee focuses more on the personal characteristics of each member. In this research, testing the existence of an audit committee focuses more on the personal characteristics of each member. The aim of this research is to examine and analyze the influence of the factors age, sex or gender, level of activity, experience in financial expertise and the general term of office of the audit committee on earnings management. This quantitative research used eighty-five samples of manufacturing companies listed on the Indonesia Stock Exchange for the 2017-2019 period. The research sample was determined using a purposive sampling technique with reference to certain criteria. The data analysis technique used is multiple linear regression. The results of this study show that the age of the audit committee has a negative effect on earnings management, while the gender of the audit committee, the level of activity of the audit committee, understanding of the audit committee's financial expertise and the age of the audit committee's term of office have no effect on earnings management.

Fostering The Changing Economic Market Demand from The View of Various Behavioral Social Personal and Economic Transformation: Empirical Evidence from A Developed Country

The key objective of the study is to foster the changing market demand from the view of various social, behavioral, personal, and economic transformations on individual investment decisions at Shanghai and Shenzhen stock markets in China. The study used a questionnaire to survey a total of 345 investors holding stocks of listed companies at both Shanghai and Shenzhen stock exchanges. The results of the study indicate that behavioral factors, personal factors, and market factors have a significant positive impact on individual investor investment decisions in both shanghai and Shenzhen stock markets while social factors have an insignificant negative impact on individual investor investment decisions in both shanghai and Shenzhen stock markets. Chinese stakeholders will understand better the role of various social, behavioral, personal, and markets factors and their impacts on stock market performance at both Shanghai and Shenzhen stock markets. The findings have important insights for various stakeholders i.e. government, regulatory bodies, practitioners, academia, industry, and researchers.

A Comparative Study on Factors Influencing Investment Decisions of Investors Based on Income Level in Coimbatore

This research project is a comparative analysis between the levels of income of individuals making investment decisions based on different factors from the Traditional Finance Theory and Behavioural Finance Theory. The study involves data that was collected using quota sampling method from the students and housing community in Coimbatore. There are about 154 responses collected for the purpose of the study. The non-parametric test Mann-Whiteney U Test was done to compare the impact of various variables in the different income groups- Low and High by analysing the statistically significant differences. The findings reveal that the factors of traditional finance and behavioural finance differ amongst the income groups. The perception of financial literacy has no significant difference between the categories. Risk & Return are almost perceived similarly by both the groups. Frame dependence and Herd behaviour have significant difference in its impact on the income groups. Although the findings reveal insightful information regarding the factors of investment decision which can be utilised by various stakeholders like investors and financial advisors, the study has its own limitations of using non-probability sampling method.

Changes in Banking Industry Stock Prices: The Role of Risk, Good Governance, Earnings, and Capital

This research, with direct implications for banking professionals and investors, aims to empirically test and analyze the RGEC components, which consist of risk profile, good corporate governance, earnings and capital, and their influence on banking stock prices listed on the Indonesian Stock Exchange (BEI). The sample for this research was determined using a purposive sampling technique, resulting in a total sample of 21 companies over 3 periods, namely 2016-2018. The data analysis technique used is Partial Least Square (PLS). The research results, which have immediate relevance for investment strategies, show that earnings proxied using ROA positively affect stock prices, while risk profile, good corporate governance, and capital do not. This indicates that earnings are still a strong signal for investor investment decisions. Therefore, the company must succeed in maintaining and increasing its earnings to become an investment choice for investors. However, even though good corporate governance and capital do not influence stock prices, it doesn’t mean that banking companies should ignore their governance and capital. These two factors are essential in maintaining good performance.

Behavioral Factors Influencing Investment Decision of Individual Investor at Nepalese Stock Market

The investment decision of individual investor is influenced by macro/micro economic and behavioral factors. Interest rate, economic growth, inflation, government policy, technological developments, etc., are the macro-economic factors, and firm size, book-to-market equity, cash flow yield, earnings yield, and dividend yield, etc. are the micro-economic factors whereas accounting information, advocate suggestion, personal financial needs, social relevance, self-image/firm-image coincidence, etc. are the behavioral factor. This paper has analyzed the perception of investor on the selected behavioral factors that makes influence on individual investor's investment decisions at Nepalese stock market. Using the structured survey questionnaire, this study concludes that behavioral factors have significant influence on investment decision of individual investor. This study revealed that to get rich quickly, reputation of the firm, feelings for a firm’s products and services, and firm status in industry are the major influencing Self–image/Firm-image factor. On the other hand, friend or coworker's recommendations, family member opinion, and broker recommendation are the most significant influencing Advocate Recommendation factors. Similarly, return maximizing, stock marketability, ease of obtaining borrowed funds, and expected dividends are the major Personal Financial Needs factors, and past trends of stock, information of dividend, price level of other stock, and information of the stock market are the major Market Information factors for influencing investment decision of individual investor at Nepalese stock market.

CONCENTRATION OF INVESTMENT CAPITAL IN MERGERS AND ACQUISITIONS: PREREQUISIGTES FOR A TECHNOLOGICAL BREAKTHROUGH

Purpose. The purpose of the article is to substantiate the prerequisites for systemic economic shifts based on the analysis of the structure of capital investments and mergers and acquisitions. Methodology of research. General scientific and special methods were used in the course of the study, in particular, analysis, synthesis, and generalization were applied while working with statistical data on the mergers and acquisitions market, and the monographic method was used when studying literary sources on issues related to the research topic. Financial analysis techniques (specifically, ratio and horizontal anal-ysis) were used in assessing the structure of capital investments in various sectors of the economy over the past twelve years (up to 2022). Additionally, the analysis of structural changes and shifts, as well as meth-ods of comparison and graphical analysis, were employed to study the dynamics of structural shifts in the economy under the influence of investment capital movement. Findings. The study of the preconditions for structural economic transformations was conducted through the assessment of the dynamics of investment capital concentration in economic sectors and the analysis of the dynamics of the number and value of mergers and acquisitions in pre-war and wartime peri-ods, as well as a review of the motives behind these transactions. The preconditions for structural changes in the economy, which are being laid at this stage through the investment decisions of investors and the political decisions of government representatives, were analyzed. The conducted research indicates the need to maintain a high share of industrial capital concentration alongside the decline in the share of indus-try in GDP due to the substantiated necessity for significant modernization of certain sectors. Originality. The study for the first time highlighted the role of investment capital by analysing the dominance of progressive industries with high added value in the structure of mergers and acquisitions, which can become the beginning of the structural transformation of the Ukrainian economy with the concen-tration of investment capital in high-income sectors. The use of analysis of the structure of capital invest-ments by economic sectors has further developed as a tool for determining the investment attractiveness of individual sectors and the dynamics of changes in the investment preferences of entities. Practical value. The results of the study can be used by government bodies in the development and refinement of the country's investment strategy, the formulation of the principles of the state's investment policy, and the adjustment of existing plans for post-war recovery; by private companies and investors (both local and foreign) for developing plans for the analysis and investment in Ukrainian economic assets, adjusting their expectations and priorities; by members of the scientific community who are interested in further development of this research topic; and by experts in related disciplines to expand their understand-ing of the issue, which may be relevant to their area of expertise, among others. Key words: investments, capital investments, capital concentration, capital market, mergers and ac-quisitions.

Role of behavioral biases in the investment decisions of Pakistan Stock Exchange investors: Moderating role of investment experience

Despite many revolutionary asset pricing models developed over the past decades, traditional finance does not explain investor behavior very well. The purpose of this study is to examine the influence of behavioral biases on the investment decisions of investors of Pakistan Stock Exchange. In addition, the moderating influence of investment experience investigated in this study. The findings were reported using a sample of 230 individual investors, who make their own investments, typically through a mutual fund, bank, or internet broker. They make investments to achieve their unique investment objectives, such as saving for retirement, a child’s education, or increasing their overall wealth. The influence of behavioral biases on investment decisions was calculated using regression analysis. Regression results show that beta and t-values are significant and have a significant impact on investment decisions. Regression findings show that Confirmation Bias, Gamblers Fallacy Bias, Negativity Bias, Bandwagon Effect Bias, Loss Aversion Bias, and Overconfidence Bias all have a substantial impact on Investment Decisions. Status quo prejudice and endowment bias have a favorable but minor influence on Investment Decisions. Investment Experience is regarded as an essential component that contributes to successful decision making under risk and uncertainty, however the results of this study show that moderating variables have a minor influence. According to the findings, the moderating variable had no effect on the connection between behavioral biases and investment decisions. And the reason for this is that behavioral biases persist regardless of investing experience.

Role of Locus of Control in the Relationship between Behavioral Biases and Investment Decision

The current study focuses on three heuristics commonly used in decision making; anchoring bias and representative bias with investor’s numeracy capability. This research explains the relationship between biases of investors in investment decision making of Pakistan Stock Exchange. The research also identifies the moderating role of locus of control between behavioral biases and decision making. Data was taken from 400 investors of Pakistan Stock Exchange. The results of the study revealed that representative bias and anchoring bias has a positive impact on investment decisions of the investors. However, the results also revealed that individual’s numeric capabilities do not affect his/her investment decision. Locus of control is used as a moderator in the study. Results show that presence of internal locus of control enhances the impact of biases on their investment decisions. Nonetheless, locus of control does not moderate the relationship between individual’s numeric capabilities and investment decisions. This study is helpful for both individual investors and the regulator in understanding the role of biases in the investment decision making.

Nexus between Chat GPT usage dimensions and investment decisions making in Pakistan: Moderating role of financial literacy

This study's primary goal is to investigate and gain better knowledge of the relationship between ChatGPT usage dimensions such as analyzing data, managing risk, optimizing portfolios, forecasting market trends, and conducting sentiment analysis and investment decisions of investors in the Pakistan stock market, as well as the moderating role of financial literacy. The sample for this study included individual stock market investors in Pakistan. Using a self-administered questionnaire and a cross-sectional design, a non-probability convenience sampling technique followed by snowball techniques was used to collect data from 388 active and potential individual investors. The study's findings showed that ChatGPT usage dimensions have a positive and significant impact on investment decision making. Furthermore, financial literacy is found to moderate the relationship between optimizing portfolios, forecasting market trends, and investment decision making. The study's findings outlined practical implications for the researcher, financial advisors, individual investors, governmental decision-makers, policymakers, and stock market authorities who are interested in leveraging the benefits of artificial intelligence and machine learning in investment decision making in the context of emerging economies like Pakistan.

Impact of Environmental, Social and Governance Factors on Investment Decision of Investors in Nepal

In recent years, there has been a growing emphasis on the impact of Environmental, Social, and Governance (ESG) factors in investment decision-making. This study explores the relationship between ESG factors and investment decisions, focusing on 392 individual investors in Pokhara, Nepal. A survey-based research design was employed, analyzing data through Confirmatory Factor Analysis and path analysis. The results indicated a significant positive impact of social and governance variables on investment decisions, whereas environmental factors showed no significant influence. Investor awareness was found to moderate the relationship between governance factors and investment decisions, emphasizing its importance. The independent variables explained approximately 69 percent of the variation in investment decisions. The study's findings underscore the significance of ESG factors in guiding investment decisions. This research offers valuable insights for brokerage houses and companies, facilitating the development of investment products tailored to individual investors' ESG preferences. These efforts contribute to promoting sustainable investment practices in Nepal.

Determinants of Stock Investment Decisions of Investor in Environmental Wetlands

This study aims to examine the determinants of investment decisions of stock investors in wetland environments. Investment is an activity of investing funds or capital in other parties, either directly or indirectly with the hope that the owner of the capital will get a number of benefits from the results of investing the funds or capital. There are several factors that influence investment decisions including financial literacy, Risk Perception, Financial Experience and Herding. This study uses a quantitative research approach. The population in this study are the investors in the Wetland Environment, with a sample of 122 investors who fit the predetermined criteria. The sample sampling technique in this study used non- probability sampling. The data that used in the study are primary data, with the data collection method in the form of a questionnaire distributed using google form. The data analysis technique uses multiple regression analysis by first conducting a validity test, reliability test, and classical assumption test. The results found that Financial Literacy, Financial Experience and Herding behaviour have a positive effect on Investment Decisions, while Risk Perception has no effect on investment decisions.

Bias Dalam Keputusan Investasi: Mitos Atau Fakta

This research aims to investigate the financial behavior of investors, including overconfidence bias, herding bias, and self-attribution bias, in their investment decisions. This is a quantitative research study that utilized questionnaire data from 208 respondents, collected through online distribution using Google Forms as the data collection medium. The sampling technique employed in this research is purposive sampling. The results indicate that overconfidence bias, herding bias, and self-attribution bias have a significant positive impact on the investment decisions of investors. Therefore, it is crucial for individuals to acquire investment knowledge early on to avoid biases that can influence investment decisions, ultimately resulting in self-inflicted losses. Additionally, diversifying one's portfolio is important to mitigate future financial losses.

Socio-Economic Determinants of Stock Market Behaviour: A Comprehensive Analysis of Investment Pattern and Decision-Making

Abstract Investor's investment decisions and market outcomes are thought to be systematically influenced by both market dynamics and information structure. Therefore, the study’s main purpose was to identify the factors influencing the investment decision of stock market investors of India. The study also identified the effect of investors' socioeconomic profiles on their stock market investing behaviour. The study was conducted on 151 individual stock market investors of Haryana state. To collect the data a structured questionnaire was used. The data were analyzed using frequency, percentage, crosstab, chi-square, KMO test, Bartlett's test of sphericity and factor analyses. The reliability of data was tested using Cronbach's Alpha. Hypothesis was set to know whether there is any relationship between demographic variable and investment pattern of investors. This study found three major factors which influence the investment decisions of stock market investors. The factors that were discovered were the investing goal, liquidity, and risk attitude. The hypothesis's outcome demonstrated a favorable correlation between investors' investing patterns and demographic characteristics.

Portfolio Based on AR Model Using 5 Stocks

An investment portfolio is a collection of stocks, bonds, and financial derivatives held by investors or financial institutions, aimed at diversifying risks and maximizing returns. This article selects stocks of Manulife, BOA, Apple, PLC, and National Pharmaceutical Group from October 21, 2022 to August 9, 2023. This article uses AR model, minimum variance model, and maximum Sharpe's ratio model to predict stock prices, and establishes investment portfolios based on the predicted values. Firstly, based on the first 75% of the data, this article predicts the last 25% of the data. Secondly, based on the prediction, the minimum variance model and the maximum Sharpe ratio model are applied and compared with SP500 within the same time frame. However, the results indicate that the SP500 index performs best in terms of yield. This study suggests that purchasing market index funds is an important investment decision for investors during the volatile US dollar interest rate hike cycle.

Risk Tolerance in Investment Decisions: Are Personality Traits the Real Triggers?

Purpose: Investment decisions of investors are strongly influenced by their risk tolerance. Previous research suggests that risk tolerance is influenced by various social, economic, demographic and psychological factors. This research aims to extend the investigative line of inquiry regarding the influence of one such psychological factor, that is, personality, on the risk tolerance of small investors without limiting their asset class or classifying them into any groups. Design/Methodology/Approach: A quantitative research method is used to measure personality traits and risk tolerance in the investment decisions of small investors in Kashmir. The study uses a structured questionnaire adopted in parts from various established scales to collect data from small investors. Correlations and multiple regression have been used to arrive at the results. Findings: Results of the study indicated that extrovert and open-to-experience individuals showed tolerance to risk. In contrast, conscientious, neurotic and agreeable individuals were risk-averse in the geographical location considered for this study. The results imply that financial advisors must consider the personality traits of investors when giving investment advice to small investors. Practical Implications: It becomes essential for financial planners and advisors to follow an investor-centric approach wherein they consider the personal characteristics of individuals when giving investment advice, and they must design the portfolios/investment avenues according to the investors’ personalities. The results of this study show that investors with different characters have different risk-taking capabilities, and a particular investor will feel comfortable investing in a specific risk-class asset. Originality/Value: There is no study or research about the influence of personality traits on risk tolerance in investment decisions in this particular geographical area, that is, Kashmir. Therefore, this study will contribute significantly towards understanding investor behaviour and help financial advisors and investment bankers suggest appropriate investment avenues.

Biased Behavior and Stock Investment Decisions of Investors in Bali, Indonesia

Investment decisions are often affected by irrational behavioral factors that cause improper logical analysis. Herding and overconfidence are two behaviors that lead to biased decision-making, specifically regarding investment. Therefore, this study aimed to test the effect of herding and overconfidence on investment decisions moderated by financial knowledge and attitude. Using a sample of 267 stock investors, the test was conducted with PLS-SEM. The results showed that overconfidence positively influences individuals' investment decisions, while herding has no effect. Financial knowledge and attitude were found not to moderate this effect but could act as predictor variables with a significant positive impact on investment decisions.
 Keywords: Herding; Financial Knowledge; Financial Attitude; Financial Behavior Overconfidence.