Abstract:
PURPOSE
The purpose behind the research is to examine the behavioral factors impacting the decision
making of an individual investor. This study is directed to recognize the influence of selected
behavioral factors on the decision making of an individual investor of Pakistan.
METHODOLOGY/SAMPLE
This research is causal and descriptive based on the quantitative nature. Hypothesis were
established after studying the prior researches or relevant literature and then the questionnaire
was created to check the level of the relationship between the variables. The sample size is 126
investors. The tests applied are Reliability test, Validity test and then Regression test to analyze
the data collected.
FINDINGS
The outcomes of the analysis show that there is an impact of the Mood, Personality Traits,
Mental Accounting, Overconfidence and Rationality (independent variables) on the decision
making of an individual investor (dependent variable). All the independent variables were
considered useful by having a significant value of 0.000. The Cronbach’s Alpha is 0.718
showing the reliability of the questionnaire.
PRACTICAL IMPLICATIONS
The findings of the research are likely to help or motivate the individual investors of Pakistan to
focus more on the behavioral factors that has been neglected since so long and then take financial
decisions for the investment. Many individuals have realized the fact that their personality traits
and moods effect their decision making approach.
