Impact of Financial Literacy on Investor’s Decision Making Behavior Among Individual Investors in Pakistan.

Abstract

Purpose – Idea to carry out this study is to foresee out the impact of financial literacy on investor’s decision making behaviour which intend to drive the investment behavior of retail investors or individuals in the stock market of Pakistan. To examine how these investors evaluate each determinant of financial literacy and take action upon that evaluation. Determinants can be responsible for acquiring certain financial sense or literacy and investment decision behavior. My concern is to see the influence of assess the financial literacy level of individual and what does each individual give weight to each financial literacy scale while consider an investment to make. Methodology Approach − WE intend to do a survey sample of identified number of observations to obtain based on modified the existed developed questionnaire from individual investors settled in different areas of Pakistan and who have experience of trading in Pakistan Stock Exchange. The approach WE have used is snowball sampling technique. The filled questionnaire will then treat with some financial tools. The theory produced for the exploration will be treated by correlation analysis, regression analysis and ANOVA two way sample testing. Originality − Previously, researchers studied in the field of finance, identified different determinants responsible for the financial behaviour of individual investor, and also studied about financial literacy in Pakistan, but this study is purely focused on examining how these investors evaluate each determinant of financial literacy and take action upon that evaluation. We are carrying out this research to mainly identify the determinants of Investment decision making behavior of investors mainly retail investors who are usually the individuals invest their money in stock market of Pakistan