Psychological Factors on Investment Decision Making in Nepalese Stock Market
Date
2024
Authors
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Publisher
Shanker Dev Campus
Abstract
This study explores the psychological factors influencing investment decisions in the
Nepalese stock market, focusing on beliefs, self-confidence, regret and remorse, and loss
aversion. The research adopts a descriptive design, utilizing structured questionnaires
distributed among 150 retail investors to examine the interplay between cognitive biases
and financial behaviors. Findings reveal that psychological factors significantly impact
investment decisions, with loss aversion and regret being prominent drivers of conservative
strategies, while self-confidence often leads to overconfident behaviors. Correlation and
regression analyses demonstrate weak to moderate relationships between these
psychological factors and investment outcomes, underscoring their nuanced effects. The
study highlights the need for enhanced financial literacy programs and policy interventions
to mitigate cognitive biases and promote rational decision-making in the Nepalese stock
market. These insights contribute to the growing field of behavioral finance, offering
region-specific evidence and practical implications for emerging markets.