Role of Psychological and Social Factors on Investment Decision of Individual Investors in Islamabad Stock Market
10 Pages Posted: 23 Aug 2018
Date Written: 2015
Investment decision making is a complicated process of choosing a best available option from a number of alternative options. It is an activity that is fulfilled after a keen evaluation of all the other alternatives. The current study investigates the psychological and social factors, impact the investment decision making of the individual investors and how the Psychological and social factor jointly are related to investment decisions. Using the descriptive statistical techniques on the data which was collected from 250 individual investors choose randomly trading at Islamabad stock exchange through a structured questionnaire. The findings of the study indicate that the psychological and social factors have a certain impact on the decision making process of the individual investors trading in the stock market while making investment decisions and investors are more aware about the situations and factors that may influence their decision making ability. There are some factors which affect males more than females like anger, fear, herding and stress. On the other hand, mood and social interaction affect female investor's decision making more than male investors. Furthermore, experienced investors face other biases such as anger.
Keywords: Behavioral Finance, Investment Decision Making, Individual Investors, Psychological Factors, Social Factors, Stock Market
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