Making Investment Decisions Research Articles

Penentuan Nilai Saham Terbaik Dalam Sistem Pendukung Keputusan Dengan Menggunakan Metode Simple Additive Weighting (SAW)

In the current era of information technology, aspects of life have become dependent on the era of globalization, especially for business people. To support the economy, investment is an important step that must be taken. Generally, basic principles are needed to decide on investment steps in the form of shares in order to obtain maximum profits. The value of investing in the capital market requires sufficient information, experience, and business sense to analyze which investments to buy, which to sell, and which to keep. The value of shares is difficult for investors to predict with potential shares, so investors need to carry out investment trend analysis and for companies to first determine their investment policy model so that they make investment decisions in accordance with what is most expected with the level of risk tolerance limits. Analysis of investment information is useful for determining the value of the shares to be selected and to find out the expected rate of return to determine the investment strategy that will be carried out.
 Making decision support using several criteria that will be part of the strategy in determining potential shares. A decision support system is a decision that can help, speed up and simplify the decision making process.
 Fuzzy Multi-Attribute Decision Making (FMADM) with the Simple Additive Weighting (SAW) method is a method that can assist in making decisions regarding several alternative decisions that must be taken with several criteria that will be taken into consideration.

Analysis of Corporate Financial Performance in Indonesia’s Transportation and Logistic Sector

Aims: To examine the effect of the board of directors, board of commissioners, independent board of commissioners, capital structure, liquidity, and sales growth on the company's profitability.
 Study Design: Dependent variable: profitability, independent variables: board of directors, board of commissioners, independent board of commissioners, capital structure, liquidity, and sales growth.
 Place and Duration of Study: The research was conducted on transportation and logistics sector companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2022.
 Methodology: The method used in data collection is study uses purposive sampling that produce 56 company data from 148 data by caltulating them using several tests: descriptive statistical, chow, hausman, lagrange multiplier, and regression using the Eviews 12 analysis tool.
 Results: The analysis test showed the results chow test with values of 0.009<0.05(FEM), the results of hausman test of 0.627>0.05(REM), and the LM test of 0.149>0.05(CEM) and the results of regression test in the hypothesis test on the variables of the board of directors resulted in a probability value of 0.000<0.05(accepted) can affect the proditability, on the variables of the board of commissioners(0.710), independent board of commissioners(0.119), Capital Structure(0.200), liquidity(0.196), sales growth(0.218) and showing probability value>0.05(not accepted) do not affect the company's profitability.
 Conclusion: The result showed that transportation and logistic sector at company’s profit level can be affected by the mangement of directors which affects the increase in profitability. However, with the increase in the number of commissioners, independent commissioners, the many burdens and obligations borne, the company cannot achieve maximum profits. The increase in sales growth doesn’t affect the company's profits because of the enormous debt and operating costs that must be paid to meet its operational needs. Thus the company can provide signals or information according to signaling theory to investors to compare and make investment decisions in the company.

The Impact of Inflation on Real Estate Investment Perfomance And Effective Investment Decisions

Purpose: This study aims to examine the impact of inflation on key variables of real estate investment performance and investment decisions. Theoretical Reference: This paper considers several models of real estate investment performance indicators because the effect of inflation on key variables of real estate investment performance is an important factor in investment decisions. Since effective investment decision is key to avert investment loss especially during inflation period, this paper follows the suggestions by Otegbulu (2022) and Georgiv, et al (2002) that property incomes and values are not static during periods of inflation bur responds to economic dynamics, and could infact trigger favourable investment opportunities in real estate. This paper therefore follows these models/suggestions of Otegbulu (2022) and Geoargiv, et al, (2002) to examine several real estate investment to offer appropriate reflection of how inflation impacts of incomes from real estate investment. Method: Data collected were analysed using Pearson Correlation Analysis to determine the relationship between inflation rate and real estate investment performance (measured by annual returns). Regression analysis was also employed on the data to determine the level of contribution or degree of impact of inflation on real estate performance. Also data collected on the exchange rate and real estate performance over the study period were analysed using Pearson Correlation Analysis to determine the relationship between exchange rate and real estate investment performance (measured by annual returns on investment). Regression analysis was also employed on the data to determine the degree of impact of exchange rate on real estate investment performance. Data collected for the analysis and hypotheses testing were secondary data over a period from 2005 – 2022. Result: The study reveals that real estate investment market generates average total annual returns of 21.39% under average inflation rate of 12.5%. The test statistics (Pearson Correlation) results shows that the higher the inflation rate, the lower the performance of the real estate investment. Also, the study reveals that as inflation persists causing exchange rate fluctuations, the test statistics (Pearson Correlation) results shows that higher exchange rate causes lower performance of real estate investment. This could be because more than 90% of the real estate construction materials in the study are imported. Conclusion: It is clear and obvious that inflation impacts highly on real estate and capable of distorting projections in property investment. Rational investors must therefore factor in inflation risk in investment decisions. The study has shown that inflation has significant impact on annual returns of real estate and consequently affects investment performance. The study concluded that the higher the inflation, the lower the performance of the real estate investment and that the continuous rise in inflation rate reduces the purchasing power of the local currency leading to local currency devaluation. Also, it was concluded that higher exchange rate causes lower performance of the real estate in terms of annual returns. Research Implications: One of the major implications of the findings from this study is that as inflation raises the volatility of local currency which adversely affect the cost of construction, real estate investment performance is hindered. The risk element increases which could lead to project cost over-run, abandonment or increased vacancy rate. Investors become skeptical in making investment decisions because of uncertainties. Policy makers should put in place policies and guidelines that will attract cross-border investors who can take advantage of the local currency devaluation to improve their real estate investment portfolios. Originality/Value: The relationship between inflation rate, exchange rate and real estate performance (measured by rate of returns on the investment) is of great concern for real estate practitioners and investors. The study is original well thought efforts of the authors as contribution to real estate practice and education in developing economies currently being threatened by rising inflation. It is believed that this study will be very useful to global investors who will like to invest in the study area in particular and other emerging markets in general.

Earnings Management and the Role of Moral Values in Investing

In this study, we use earnings management to examine (1) how investors regard a CEO’s commitment to honesty and (2) the impact of their perceptions, in light of their own moral values, on their investment decisions. In two laboratory experiments using students as investor proxies, we find that investors perceive a CEO as being more committed to honesty when they believe the CEO has engaged less in earnings management. A one standard deviation increase in a CEO’s perceived commitment to honesty, compared to that of another CEO, leads to a 40% reduction in the importance the investors assigned, when making investment decisions, to differences in the two CEOs’ claimed future returns. This effect is particularly pronounced among investors with a proself value orientation. For prosocial investors, their moral values and those they attribute to the CEO directly influence their investment decisions, with returns playing a secondary role. Our findings contrast with the idea, implicit in the literature on ‘sin’ stocks, that morality is a niche concern. By contrast, we find that moral values play a significant role for distinct types of investors and that they influence investment decisions for both moral and pecuniary reasons.

Inspecting the efficiency of cryptocurrency markets: New evidence

The purpose of this study is to examine the market efficiency of cryptocurrencies, specifically at a weak level. The study focuses on six prominent cryptocurrencies selected based on their significant market capitalization: Bitcoin (BTC), Tether (USDT), Ethereum (ETH), Binance Coin (BNB-USD), Ripple (XRP-USD), and Cardano USD (ADA-USD). The analysis utilizes unit root, Ljung–Box, variance ratio, runs, and the Brock–Dechert–Scheinkman (BDS) tests to assess different aspects of market efficiency. The data spans from September 2017 to April 2023, encompassing a wide time frame to capture potential shifts in market behavior. The results of all the tests, except the BDS test, indicate that the tested cryptocurrencies' markets are inefficient. However, the BDS test yielded different results, suggesting that BTC and ETH exhibit market efficiency compared to the other cryptocurrencies. This discrepancy indicates that the BDS test may be capturing different aspects of the time series behavior. The practical implication is that investors and market participants should exercise caution and consider the varying levels of efficiency when making decisions regarding these cryptocurrencies. Also, investors should consider a range of factors, including technical and fundamental analyses, when making investment decisions in a dynamic and evolving market.

Behavioral Finance: Hippocrates Personality and Behavioral of Islamic Finance on Investment Decision Gen Z

This study aims to analyze Hippocrates' personality and an investor's financial behavior in making investment decisions. A quantitative research design was used to test the research hypotheses. The respondents consisted of Muslim students from universities in Bandung who belong to the category of Generation Z. The data analysis technique used was the Structural Equation Model (SEM) AMOS. The Hippocrates personality has a significant effect on financial behavior, and financial behavior has a significant effect on investment decisions. However, the Hippocrates personality does not have a significant effect on investment decisions. The findings of this research indicate that financial behavior needs to be improved by applying Sharia financial concepts so that it can support investment activities that are in line with Sharia principles. Personality Hippocrates emphasized choosing investments that are in line with the student's personality characteristics. This personality type is more inclined towards the behavior of calculating the appropriate risks and benefits of the investments made. The novelty of this research is demonstrated by the Islamic financial perspective which examines the relationship between Hippocrates' personality and financial behavior on investment decision-making. The expected implication is that Islamic finance can increase investment by knowing the Hippocratic personality type and financial behavior among Gen Z Muslims. Originality/Value: The originality of this research is found in studying personality types according to Hippocrates (129-200 BC) and the perspective of Islamic Finance in making investment decisions.

FINANCIAL COMPETITIVENESS OF COMPANIES OPERATING IN THE AIR TRANSPORTATION SECTOR IN BORSA ISTANBUL

The main objective of this study is to evaluate the financial competitiveness of companies operating in the air transportation sector in Borsa, Istanbul. Three companies are operating in the air transportation sector in Borsa Istanbul. Generally accepted financial ratios were used to determine the financial competitiveness of these companies. The period analyzed in the study using quarterly balance sheet periods is between 06/2019 and 03/2023. The number of periods is sixteen. On the other hand, balance sheet periods in which each company announced a loss were excluded from the analysis. The implementation process of the study consists of three stages. First, the OCRA method is used to determine the financial competitiveness of companies. Second, the findings obtained are compared with the ARAS method. Finally, the statistical significance of the results obtained from the two methods is tested with Spearman rank correlation. The CRITIC method, which is based on the standard deviation of each criterion and its relationship with other criteria, was used in the weighting process. The study results provide important information about airlines' liquidity, managerial behavior, profitability and market capitalization. This information interests all market participants who can help them make investment decisions.

Corporate ESG issues and retail investors’ investment decision: a moral awareness perspective

The specific goal of this study is to find out how retail investors consider company ESG issues while making investment decisions, with their moral awareness (MA) serving as a moderator. The framework's foundations are the norm activation model (NAM) and the theory of planned behavior (TPB). The report is based on a questionnaire survey that was completed by 599 retail investors in Dhaka and Chattagram, Bangladesh. To examine the data and verify the theories, the PLS path modeling approach is employed. Six hypotheses are investigated using structural equation modeling; five are found to be significant and one to be non-significant. All of the hypotheses are positive. The findings of the research demonstrate that when making investment decisions, investors take a company's social, environmental, and governance issues into account. The moral awareness of investors seems to influence their investment decisions as well. By presenting empirical data on the relationship between business ESG issues and investment decisions with moderating impacts on investors' moral awareness, the paper advances the field of behavioral finance research. It implies that corporate advertising tactics may support global reporting requirements, draw impact investors, and promote moral and environmental education. To safeguard ESG concerns and promote sustainable growth of the capital market and economy, governments should enact laws, rules, and directives.

Consistent Earner Strategy Portofolio Saham Value-Glamour

This research aims to find empirical evidence through the evaluation of return and risk-adjusted performance in value and glamour stock portfolios formed with a consistent earner strategy. The research focuses on the Indonesia Stock Exchange (IDX), using the entire population of listed and actively traded stocks in the LQ-45 Index. Data sources include secondary data, consisting of company financial reports from 2016 to 2021 accessed through the websites of the Indonesia Stock Exchange, Yahoo Finance, and IpotNews. The research sample comprises companies included in the LQ-45 Index, selected through purposive sampling. The data analysis method involves quantitative analysis, using statistical tests such as independent sample tests with SPSS. The study's results indicate that the probability values for the average portfolio returns and portfolio risks for both value and glamour stocks are >0.05, suggesting no significant difference in the average return levels for each portfolio. In general, the research concludes that the Indonesian capital market fails to demonstrate the value investing anomaly phenomenon, and investors cannot expect consistent abnormal returns over the observation period. The study has crucial implications for understanding the efficiency of the capital market. The practical contribution of this research is expected to provide information and insights to market participants in making investment decisions, especially in the Indonesian capital market.

The impact of disposition effect, herding and overconfidence on investment decision making moderated by financial literacy

Behavioral finance elucidates how investors rationally commit errors in the process of making investment decisions as a result of cognitive and emotional biases, ultimately resulting in unfavorable investment choices. People are unable to avoid a variety of behavioral biases that have an impact on investors' investment decision-making processes. The human mind employs shortcuts and emotional filters to interpret information, leading to errors in the decision-making process. The objective of this study is to investigate and assess the impact of behavioral biases such as disposition effects, herding, and overconfidence on investment decision-making. Additionally, we will examine how financial literacy moderates these biases. The research employed a purposive sample strategy to select generation Z investors in Kediri City. The sample size of 400 respondents was determined using the Krejcie & Morgan table. This research employs the Partial Least Squares (PLS) Structural Equation Model (SEM) analysis method using the SmartPLS version 3 data processing application. The research findings indicate that the disposition effect and overconfidence exert a substantial impact on investment decision-making; however, herding does not exhibit a significant influence on investment choice-making. Financial knowledge enhances the impact of the disposition effect on investment decision-making in a positive way. Financial literacy has a negative moderating effect on the influence of herding and overconfidence on investment decision-making among Generation Z investors in Kediri City.

BEHAVIORAL BIASES AND PORTFOLIO STRATEGIES: ANALYZING THE IMPACT ON INVESTOR DECISION MAKING IN THE NEPALESE STOCK MARKET

Our paper explored the impact of demographic variables on the manifestation of behavioral biases among Nepalese portfolio investors as they make investment decisions. Our research analyzed the relationship between age, gender, and experience, and five common biases such as overconfidence, anchoring, herding, loss aversion, and hindsight. Our survey of 132 investors revealed that demographic factors play a role in the presence of these biases, with female investors exhibiting higher overconfidence and anchoring biases, while male investors displayed loss aversion, herding, and hindsight biases. Younger investors were found to be more overconfident and prone to loss aversion, whereas more experienced investor demonstrated greater overconfidence in their analysis skills. This paper provides crucial insight into the importance of considering demographic factors in addressing investment decision-making biases. It’s worth noting that the responses and sample location may not be fully representative.

The Effect of Net Income and Dividends on Stock Prices at PT Telkom Indonesia Tbk in 2018 -2022

This research aims to analyze the effect of net profit and dividends on share prices at PT Telkom Indonesia Tbk during the period 2018 to 2022. The data used is company financial data which includes net profit, dividends and share prices. The research method applied is quantitative, Quantitative methods are a type of research that is more organized and methodical in terms of the use of numbers, as well as more clear and precise in the way it collects data and presents its findings. The research results show that net profit has a positive and insignificant influence on the share price of PT Telkom Indonesia Tbk. This shows that the higher the company's net profit, the higher the share price, but there are insignificant influencing factors such as economic conditions, industry competitors and so on. Dividends also have a positive and insignificant influence on the company's share price. This means that the higher the dividend distributed, the higher the share price of PT Telkom Indonesia Tbk. Apart from that, net profit and dividends have a positive and insignificant influence on share prices. This research provides a better understanding of the factors that influence company share prices and can be a reference for investors and shareholders in making investment decisions.

Analysis of the Use of CAPM in Investing Decisions in the Financial Sector Listed on the IDX for the Period 2020 – 2022

This study aims to analyze the use of the Capital Asset Pricing Model (CAPM) in making investment decisions in the financial sector listed on the Indonesia Stock Exchange (IDX) during the 2020-2022 period. This research method involves collecting historical stock price data and financial data of companies listed in the IDX financial sector during the period under study. This research uses a descriptive research design with a quantitative approach and uses secondary data. Furthermore, statistical analysis will be conducted to test the effect of using CAPM on investment decisions. The results of this study are expected to provide valuable insights for investors and financial market participants. This research can also help in identifying companies in the financial sector that have higher return potential based on CAPM-based analysis.

Analisis Fundamental untuk Menilai Saham dengan Metode Valuasi Relatif terhadap Keputusan Investasi

Purpose: The purpose of this study is to determine the condition of a food and beverage company's stock price in an undervalued (cheap) or overvalued (expensive) position so that it can make investment decisions. Research methodology: This research methodology uses a quantitative descriptive method. The sampling technique used was purposive sampling based on criteria. Then obtained eight research samples including CEKA, ICBP, INDF, MYOR, ROTI, SKLT, ULTJ, and DLTA. For data collection techniques in this study using the documentation method and data analysis was performed manually using Microsoft Excel. Results: The results of stock valuation using the PER, PBV and PSR methods on average show that the company is in overvalued condition, including ICBP, MYOR, ROTI, ULTJ, SKLT and DLTA shares, so a good investment decision is to sell. Meanwhile, shares of CEKA and INDF companies have an average calculated value of undervalued (cheap) so the right investment decision is to buy these shares. Limitations: This study only uses six financial ratio scales to see company performance and share valuation using only relative valuation methods such as PER, PBV and PSR. Contribution: This research can be a good reference source for investors in making investment decisions, especially those who want to invest their funds in stocks. In addition, the company is expected to be able to provide evaluation information on the company's financial performance. So it can bring potential investors to invest and gain loyalty to the company.

Factors that Influence Banking Performance in Indonesia

This research aims to examine the influence of ESG Score, NPL, Bank Size, Bank Capital, Liquidity Risk, Bank Liquidity, revenue growth, Bank Leverage, Economic Growth, Inflation, Diversification, Labor Productivity, and ESG Score Moderating on Bank performance, which is shown with the achievement of Return on Assets. The research sample used in this research is banks listed on the Indonesia Stock Exchange for the period 2018 to 2022. Data was taken from time series data which contains data from 2018 to 2022 for the independent variable and bank performance as the dependent variable. The research methodology used is Ordinary Least Squares using Eviews 12 software. The findings and contributions in this research are that ESG Score, Non-Performing Loans, Bank Leverage, Economic Growth, and Inflation influence bank performance. Meanwhile, Bank Size, Bank Capital, Liquidity Risk, Bank Liquidity, and revenue growth do not have a significant effect on changes in bank performance. Bank Leverage, Economic Growth, and Inflation have a positive and significant effect on changes in bank performance, while ESG Score and Non-Performing Loans have a negative and significant effect on changes in bank performance. Banks can take advantage of Bank Leverage, Economic Growth, and Inflation opportunities to improve their performance so that investors are interested in buying bank shares. Low and controlled Non-Performing Loans will increase banking profits, thereby improving the bank's performance. It is hoped that the results of this research can provide input for banks and investors to consider ESG Score, Non-Performing Loans, Bank Leverage, Economic Growth, and Inflation in managing their business and in making investment decisions.

An enhanced interval-valued decomposition integration model for stock price prediction based on comprehensive feature extraction and optimized deep learning

For the purpose of managing financial risk and making investment decisions, interval stock price forecasting is essential. Currently, decomposition integration frameworks are widely used in point-valued stock price forecasting studies, mainly focusing on mining internal information. However, point forecasts are difficult to adequately capture price uncertainty and may suffer from loss of volatile information. Therefore, this paper proposes an enhanced interval-valued decomposition integration model for stock price prediction based on comprehensive feature extraction and optimized deep learning. Firstly, the interval variational modal decomposition with feedback mechanism (FIVMD) is proposed to extract internal features and can decompose interval values into interval trend and residual. FIVMD not only solves the interval decomposition challenge, but also helps to improve the internal feature extraction capability. Secondly, while considering the influencing factors more comprehensively, appropriate feature selection and compression techniques can effectively achieve external feature extraction, obtain the best influencing factors, and improve the modeling capability of high-dimensional data. Finally, the final prediction results are obtained by modeling the interval trend and residuals separately through the optimization algorithm and deep learning model to improve the prediction accuracy. The results of the empirical analysis reveal that the proposed interval decomposition integrated model has the smallest of the three evaluation metrics, where the values of interval mean average percentage errors (IMAPE) are 1.8188%, 1.1244%, 1.9001%, and 2.1542% respectively. This shows that the model is significantly more accurate and stable than the other comparative models, and it is a successful model for predicting interval-valued stock prices.

A Literature Study of Behavior Finance and Investor Decision-Making

One of the most contentious topics in the development of modern financial economics has been the rationality of financial markets. Conventional finance postulates that investors are rational and impartial, capable of critically assessing the risks and returns associated with investments, and thus making unbiased investment decisions. Nevertheless, as time went on, there were increasing voices from a considerable academic community against the rationality assumption. Among those, behavioral finance has developed to challenge the legitimacy of the rational theory's underlying premises. It has emerged as a field that focuses on studying the actual behavior of investors in financial markets. The paper examines some consensus of traditional financial theories and anomalies in the stock market to introduce prominent cognitive biases influencing people when making investment decisions. It explores emotions behind the cognitive biases and the ways to impact investor behavior and thus gives suggestions about how to reduce errors in financial markets and capitalize on the mistakes of others by adopting an investment strategy that runs counter to common practice.

Which ESG+F dimension matters most to retail investors? An experimental study on financial decisions and future generations

In this study, we address the ongoing debate about the relative importance of the three dimensions of the ESG framework and whether they are sufficient to capture the full scope of sustainability. We propose a new dimension, the Future Generations pillar (F-pillar), which aims to account for intergenerational equity and sustainability. Our online experiment explores how retail investors make investment decisions when presented with different combinations of financial and ESG information, including the F-pillar. Our findings suggest that retail investors try to balance their financial objectives with sustainability considerations. Moreover, the E-pillar appears to be most relevant when investors adopt a sustainability perspective, while the S-pillar is most relevant when investors consider the financial perspective. Interestingly, our results show that an explicit F-pillar is somewhat redundant, as individuals believe that the three existing ESG pillars already indirectly address the sustainability towards the future generations. This study contributes to the ongoing debate on the relevance of the ESG framework and highlights the need to further explore the interplay between financial and sustainability considerations in retail investment decision-making.

The influence of financial behavior on capital market investment decision making with mediating of financial literacy in Yogyakarta

The growth of capital market investors and financial literacy has increased every year and investors in making an investment decision However, financial theory argues that there are psychological biases that can influence investors in making inappropriate investment decisions. This study aims to examine the influence and analyze Overconfidence, Loss Aversion and Herding Bias on investment decisions and Financial Literacy as a mediating variable. Financial Literacy is used as mediating variable in the relationship of Overconfidence, Loss Aversion. However Herding Bias variables on Investment Decisions. This study uses non-probability sampling techniques to as many as 163 investors stock in Yogyakarta as respondents. Findings/Results: the study shows that overconfidence, loss aversion and herding bias have a significant effect on investment decisions and overconfidence, loss aversion and herding bias are not mediated by financial literacy in making investment decisions.

Influence of Financial Literacy, Risk Tolerance, Financial Efficacy on Investment Decisions and Financial Management Behavior

The problem in this study lies in the development of financial literacy in the age range of 18-25 years which has continued to decrease by 3 times in a row since the SNLIK (National Survey of Financial Literacy and Inclusion) was conducted. This age range is included in the Z generation category. SNLIK was first conducted in 2013, and the survey is conducted every 3 years by the OJK (Financial Services Authority). From this phenomenon, it can be a reference that there are many Generation Z people who are afraid or fail or have not made an investment decision. This study aims to determine how understandable and effective financial literacy, risk tolerance, financial efficacy are in making investment decisions and financial management behavior.The population of this study is generation Z of Indonesia with birth ranges from 1996 to 2009. The sampling technique was purposive sampling with a total sampling of 200 respondents. The type of data used is primary data and secondary data. The data collection method used is through an online questionnaire (google form). The analysis technique used is SEM with Smart pls 3.0 software. The results showed that: financial literacy has an effect on financial management behavior, risk tolerance has no effect on financial management behavior, financial efficacy has had an effect on financial management behavior, financial literacy has had an effect on investment decisions, risk tolerance has had an effect on investment decisions, financial efficacy has no effect on decisions Investment and financial management behavior influence investment decisions.