Manuscript Title:

INFLUENCE OF BEHAVIOURAL FACTORS ON STOCK MARKET INVESTMENT DECISION IN INDIA

Author:

P. PRATEEK THODKAR, B. SATHISH KUMAR

DOI Number:

DOI:10.17605/OSF.IO/CGXN6

Published : 2022-05-23

About the author(s)

1. P. PRATEEK THODKAR - Research Scholar, CHRIST (Deemed to be University).
2. B. SATHISH KUMAR - Assistant Professor, CHRIST (Deemed to be University).

Full Text : PDF

Abstract

Investment has various avenues and each avenue has its own advantages and disadvantages hence it is important to take decision on the right type of avenue based on the objective and necessity of the investors. Here the study concentrated on behavioural aspect of an individual while he decides on investing in various stocks in the stock market as an investment avenue. The study concludes that behavioural factors such as heuristic, prospect, market, herding have positive and significant influence on an individual’s investment decision making in stock market. Heuristic has the greatest influence with a standard estimation of 0.410 which could mean investors in Indian market follow the rule of thumb or learn from their past experiences, pre-existing ideas/concepts of the stock, skills that they possess, analyzing the future based on recent stock price movement. The second most influential behavioural factor is market with a standard estimation of 0.202 which interprets that investor’s use stock market information while they make investment decision. Market information such as stock prices, past trends of the stock, price changes, examining economic, financial, and other qualitative and quantitative factors. The third influential behavioural factor is prospect with a standard estimation of 0.202 which interprets that people value their losses greater than their gains and use factors such mental accounting, regret aversion and loss aversion to make decisions while investing. Indian investors value herding as a behavioural factor as the least influencing with a standard estimation of 0.125 which interprets that they do not follow the herd or there exists no bandwagon effect which they make their investment decisions in the stock market.


Keywords

INFLUENCE OF BEHAVIOURAL FACTORS ON STOCK MARKET INVESTMENT DECISION IN INDIA