BEHAVIORAL BIASES ON INVESTMENT DECISIONS OF NEPALESE SECONDARY MARKET INVESTORS
Date
2024
Authors
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Journal ISSN
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Publisher
Shanker Dev Campus
Abstract
This study shows how individual NEPSE investors' decisions are impacted by
behavioral biases. The objective of this research is to examine the correlation between
behavioral bias factors and investment choices, as well as the influence of behavioral
bias variables on share market investment decisions in Nepal, including herding bias,
anchoring bias, overconfidence bias, and disposition effect bias. A descriptive and
causal comparative research design was used in this investigation. The 249 NEPSE
listed enterprises were the population of this study, which was conducted using
questionnaires distributed to 215 investors. After data collection and surveying,
analysis was done using regression, correlation, and descriptive statistics. The
regression analysis's findings demonstrated that herding bias, anchoring bias,
disposition impact, and overconfidence all had significant and favorable effects on
investing choices. The study has implications for financial counselors to become more
proficient, policy makers to investigate biases in prior policy changes, and individual
investors to better understand their own behavior. Regulators has the authority to create
regulations aimed at eliminating investor perceptions of prejudice. This study can be
used by brokers to identify the biases impacting investor behavior. They are able to
protect investors from making bad choices by offering sage advice to their clients. With
the help of this study, investors can assess their own conduct. They also have the ability
to recognize profitable stocks and increase their purchases.
Key words: Overconfidence, Anchoring, Disposition Effect, Herding, Investment
Decision