Behavioral Factors and Investment Decision: A Case of Nepal

14 Pages Posted: 2 Oct 2020

See all articles by Post Raj Pokharel

Post Raj Pokharel

Harvard Pharmaceuticals P. Ltd.; Kathmandu University School of Management; Boston International College

Date Written: September 5, 2020


The main objective of this study is to examine the investors’ opinions or behavior in Nepalese stock market. Based on many researches, this study used four independent variables heuristic, prospect, market, and herding and a dependent variable investment performance of Nepal Stock Exchange. This study is an empirical research based on primary data collected from 120 respondents who have made investment in shares of listed companies in NEPSE. The results of correlation analysis showed that market factor has significant impact on the investment performance. The findings of the study suggested that heuristic (including anchoring, representative, overconfidence, availability bias and gamble’s fallacy), herding (choice of trading stocks; buying and selling; volume of trading stocks, speed of herding) and prospect (loss aversion, regret aversion, and mental accounting) have no significant relationship with investment performance.

Keywords: Investment, NEPSE Stock

JEL Classification: G11, N25

Suggested Citation

Pokharel, Post Raj, Behavioral Factors and Investment Decision: A Case of Nepal (September 5, 2020). Available at SSRN: or

Post Raj Pokharel (Contact Author)

Harvard Pharmaceuticals P. Ltd. ( email )

Chitwan, Bagmati 44200
9845331778 (Phone)


Kathmandu University School of Management ( email )

Boston International College ( email )

Bharatpur, Chitwan, Nepal

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