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

Abstract

This study has investigated the effect of behavioral factors on investors’ investment decisions in stock market. The study has used descriptive and casual research design. The sampling technique for the study followed convenience sampling. Data have analyzed by using different statistical technique such as descriptive statistic, correlation analysis and regression analysis. This study showed that investors agreed that market factors and prospect factor highly affects their investment decision of investors and they believe that their decision is also high. The correlation analysis shows that the correlation analysis reveals that shows that there is significant position association between heuristic factors and investment decision performance. 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 performance. Moreover, correlation value between herding factors and the investment decision performance is significant positive. The regression analysis shows that there is significant positive effect of heuristic factors on investment decision performance. Then, there is also significant positive effect of prospect factors on investment decision performance. At the meantime, market factors have significant positive impact on investment decision performance. Finally, herding factors have significant positive effect on investment decision performance. However, all the behavioral factors have significant impact on investors’ investment decision in stock market.