EFFECT OF BEHAVIORAL FACTORS ON INVESTORS’ INVESTMENT DECISIONS IN STOCK MARKET

Abstract

The main purpose of the study was to examine the effect of behavioral factors on investors’ investment decisions in stock market. The study has used descriptive and casual research design. This study used descriptive statistic, correlation analysis and regression analysis to analyze the data by using SPSS version 26. This study shows that investors agreed that herding factors and heuristic factor highly affects their investment decision of investors and they believe that their decision is also high. The correlation analysis reveals that the correlation analysis reveals that shows that there is significant position association between heuristic factors and investment decision. Similarly, prospect factors have significant positive relationship with investors’ investment decision. At the same time, there is significant positive association between market factors and investment decision. Moreover, correlation value between herding factors and the investment decision is significant positive. The regression analysis shows that there is significant positive effect of heuristic factors on investment decision. Then, there is also significant positive effect of prospect factors on investment decision. At the meantime, market factors have significant positive impact on investment decision. Finally, herding factors have significant positive effect on investment decision. Therefore, all the behavioral factors have significant impact on investors’ investment decision in stock market.