IMPACT OF BEHAVIORAL FACTORS ON INVESTMENT DECISIONS DURING COVID-19

Abstract

Purpose This thesis aims to investigate the impact of behavioural factors on the decision-making process ofinvestment in the time ofCorona. The main factors are categorized into four types: Herding bias, Market information, Prospect bias, and Heuristic bias. Methodology & Design The research conducted for this study is quantitative in which the empirical results are calculated to find out the clear opinion from the data collected through the questionnaire. In addition, the study used regression analysis to discover the independent influence variables have on the dependent variable. Findings The research findings show that behavioural factors like heuristic bias, prospect bias, and herding bias have a significant impact on the decision-making process ofinvestors. In contrast, market information has also shown a positive impact on the decision-making process of investors. To validate the findings ofthis thesis, it is essentially needed to carry out additional research experiments with a much greater sample size and numerous ranges of respondents, involving institutional investors also. Limitations The study limitation is that it doesn't consider the other factors that impacted the decision making process of investors as the factors used are limited in this thesis. The main limitation ofthis thesis is that we were researching the Corona pandemic situation, due to which data collection and execution ofthe research was very challenging. Recommendations It has been recommended that research must also find the other factors that can impact the decision-making process of investors to have a clear vision of all these factors impact. In addition, the research should also be carried out afterthe corona pandemic to find out the after effects ofthe Coronavirus on human behaviours, which ultimately affect the decision-making process of investors.