A Study of Factors Affecting the Investment Behaviour of Individuals: A Systematic Literature Review

Authors

  • Sharma P Assistant Professor Dept. of Commerce (Morning) St. Xavier’s College (Autonomous), Kolkata, India
  • Agnihotri M Assistant Professor, Dept. of Information Technology Commerce (Morning), St. Xavier’s College (Autonomous), Kolkata, india

Keywords:

Investment Behaviour, Cognitive Biases, Personality Traits, Digital Skills, Financial Literacy

Abstract

The important process of making financial decisions is influenced by a variety of variables that vary from individual to individual. Investors do not necessarily make reasonable decisions because their personality traits, emotional biases, cognitive biases all play a big part in decision-making process. This article aims to perform an in-depth review of researches on Investment behaviour and factors affecting it that has been published in the last 22 years. This paper elucidates the impact of some common factors which impact the Investors’ decision-making process. Accordingly, systematic literature review is conducted for this research. Only peer-reviewed journal articles from well-known databases are considered for the literature review, which also identifies gaps in earlier research and develops a conceptual model.

References

Agarwal, S., Amromin, G., Itzhak, B., & Chomsisengphet, S. (2015). Financial literacy and financial planning: Evidence from India. Journal of Housing Economics.

Aker, J. C., Boumnijel, R., McClelland, A., & Tierney, N. (2016). Payment mechanisms and antipoverty programs:Evidence from a mobile money cash transfer experiment in Niger. Economic Development and Cultural Change, 1-37.

Akims, M. A., & Jagongo. (2017). FINANCIAL LITERACY AND ITS IMPACT ON INVESTMENT DECISIONS IN NIGERIA: A THEORETICAL PERSPECTIVE. International Journal of Scientific Research and Innovative Technology.

Akter, U., & Rakibul Anwar, S. M. (2021). Revisiting the Impact of Mobile Banking in Financial Inclusion Among the Developing Countries. International Journal of Financial Research.

Ali Seraj, A. H., & Alzain, E. (2022). The roles of financial literacy and overconfidence in investment decisions in Saudi Arabia. Frontiers in Psychology.

Al-Tamimi, H. A., & Bin Kalli, A. A. (2009). Financial literacy and investment decisions of UAE investors. The Journal of Risk Finance.

Au, K., Chan, F., & Wang, D. (2003). Mood in foreign exchange trading: Cognitive processes and performance. Organizational Behaviour and Human Decision Processes.

Bakar, S., & Chui Yi, A. N. (2015). The Impact of Psychological Factors on Investors’ Decision Making in Malaysian Stock Market: A Case of Klang Valley and Pahang. Procedia Economics & Finance Elsevier.

Bernheim, B., & Garrett, D. M. (2001). Education and saving:: The long-term effects of high school financial curriculum mandates. Journal of Public Economics.

Beugelsdijk, S., & Frijns, B. (2010). A cultural explanation of the foreign bias in international asset allocation. Journal Of Banking & Finance.

Bikas, E., & Jureviciene, D. (2012). Behavioural Finance: The Emergence and Development Trends. Procedia - Social and Behavioral Sciences.

Bloomfield, R., & Libby, R. (1999). Confidence and the welfare of less-informed investors. Accounting, Organizations and Society.

C.J van Rooij, M., & Lusardi, A. (2012). FINANCIAL LITERACY, RETIREMENT PLANNING AND HOUSEHOLD WEALTH. The Economic Journal.

Chaterjee, D. (2020). Cultural Value Orientation and Stock Trading Behavior: A Study of Individual Investors from India. Chatterjee, Devlina, Cultural Value Orientation and Stock Trading Behavior: A SSRN: https://ssrn.com/abstract=3683298 or http://dx.doi.org/10.2139/ssrn.3683298.

Choudhary, A., & Subramanian R, B. (2019). Understanding Investment Behaviour: A Study on the Role of Personality in Financial Investment Decisions in India. RESEARCH REVIEW International Journal of Multidisciplinary.

Collins, J. M., & O'Rourke, C. (2009). Financial Education and Counseling — Still Holding Promise. The Journal of Consumer Affairs.

Coyne, S. M., & Padilla-Walker, L. M. (2013). Emerging in a Digital World: A Decade Review of Media Use, Effects, and Gratifications in Emerging Adulthood. Emerging Adulthood, 1(2), 125-137.

Goodwin Groen, R., & Klapper, L. (2020). Advancing Women's Digital Financial Inclusion. Better Than Cash Alliance, Women’s World Banking, and the World Bank Group.

Gupta, K., & Gupta, S. (2018). Financial Literacy and its Impact on Investment Decisions-A study of Rural Areas of Himachal Pradesh. International Journal of Research in Management, Economics and Commerce.

H S, S., & Shankar K C, S. (2017). "A study on technology and its impact of investment behaviour. International Journal of Scientific Development and Research .

Hameed Al-Dahana, N. S., & Hasanb, M. F. (2019). Effect of Cognitive and Emotional Biases on Investors Decision:An Analytical Study of the Iraq Stock Exchange . International Journal of Innovation, Creativity and Change. www.ijicc.net Volume 9, Issue 10, 2019 .

Herrmann, A. F. (2007). “People get emotional about their money:” performing masculinity in a financial discussion board. Journal of Computer-Mediated Communication.

Hidayah, T. N., & Kustina, L. (2020). Impact of Personality Traits on The Investor Sentiment. International Journal of Business Economics.

Inclusion, G. G. (2020). Advancing the Digital Financial Inclusion of Youth. OECD.

Joseph, C. N. (2015). ILLUSION OF CONTROL DAN FAKTOR DEMOGRAFI DALAM PENGAMBILAN KEPUTUSAN INVESTASI.

Kaleem, A., Wajid, R., & Hussain, H. S. (2009). Factors affecting financial advisor’s perception in portfolio management: with reference to Pakistan. Oxford Business and Economics Conference Program.

Kartini, K. (2021). "Behavioral Biases on Investment Decision: A Case Study in Indonesia. Kartini KARTINI, Katiya NAHDA / Journal of Asian Finance, Economics and Business Vol 8 No 3 (2021) 1231–1240.

Khera, P., Ng, S., & Ogawa, S. (2021). Measuring Digital Financial Inclusion in Emerging Market and Developing Economies: A New Index. International Monetary Fund.

Kübilay, B., & Bayrakdaroğlu, A. (2016). An Empirical Research on Investor Biases in Financial Decision-Making, Financial Risk Tolerance and Financial Personality . International Journal of Financial Research .

Kumar, S., & Goyal, N. (2015). Behavioural biases in investment decision making – a systematic literature review. Qualitative Research in Financial Markets.

Kusuma Negara, A., & Galuh Febrianto, H. (2020). PENGARUH KEMAJUAN TEKNOLOGI INFORMASI DAN PENGETAHUAN INVESTASI TERHADAP MINAT INVESTASI GENERASI MILENIAL DI PASAR MODAL. Business Journal Management.

Lufti. (2010). THE RELATIONSHIP BETWEEN DEMOGRAPHIC FACTORS AND INVESTMENT DECISION IN SURABAYA. . Journal of Economics, Business and Accountancy Ventura.

LUSARDI, A., & MITCHELL, O. S. (2010). Financial Literacy among the Young. The Journal of Consumer Affairs.

M Barber, B., & Odean, T. (2001). The Internet and the Investor. Journal of Economic Perspectives—Volume 15.

M. Jamuni, A. (2022). A Study on Impact of Financial Literacy on Individuals Financial Behaviour. International Journal of Social Science and Humanities Research .

Mayfield, C., & Perdue, G. (2008). Investment management and personality type. Financial Services Review.

McDonnell, J. (2007). Music, scent and time preferences for waiting lines. International Journal of Bank Marketing.

Mehra, D., & Indapurkar, K. (2020). "Financial Literacy and Investment Behaviour : A Study on the Working Age Population of India. Journal of Emerging Technologies and Innovative Research .

Mittal, M., & Vyas, R. (2008). Personality type and investment choice an empirical study. The ICFAI University journal of Behavioral Finance, Vol. V, No.3,pp.6-22.

Mouna, A., & Anis, J. (2016). Financial literacy in Tunisia: Its determinants and its implications on investment behavior. Research in International Business & Finance.

Nauman Sadiq, M., & Khan, R. A. (2019). Impact of Personality Traits on Investment Intention: The MediatingRole of Risk Behaviour and the Moderating Role of Financial Literacy. Journal of Finance & Economics Research.

Odean, T. (2002). Are Investors Reluctant to Realize Their Losses? The Journal of American Finance Association.

R. Graham, J., & R. Harvey, C. (2009). Investor Competence, Trading Frequency, and Home Bias. Management Science.

Raheja, S., & Dhiman, B. (2017). Influence of Personality Traits and Behavioral Biases on Investment Decision of Investors. Asian Journal of Management.

Riley Jr, W. B., & Chow, K. V. (1992). Asset allocation and individual risk aversion. Financial Analysts Journal.

Ritter, J. R. (2003). Behavioral finance. Pacific-Basin Finance Journal.

Sadi, R., & Hassan, G. A. (2011). Behavioral Finance: The Explanation of Investors’ Personality and Perceptual Biases Effects on Financial Decisions. International Journal of Economics and Finance.

Schaefer, P. S., & Williams, C. C. (2004). Overconfidence and the Big Five. Journal of Research in Personality.

Shukla, A., & Jamal Rushdi, N. (2020). IMPACT OF BEHAVIORAL BIASES ON INVESTMENT DECISIONS ‘A SYSTEMATIC REVIEW’. International Journal of Management .

Singh, S. (2009). Tomorrow’s Research Today.Investors’ Behavior at Indian Capital Markets. Social Science Research Network.

Sivaramakrishnan, S., Srivastava, M., & Rastogi, A. (2017). Attitudinal factors, financial literacy, and stock market participation. International Journal of Bank Marketing.

Solanki, S., & Wadhwa, S. (2019). Digital Technology: An Influential Factor in Investment Decision Making. International Journal of Engineering and Advanced Technology.

Stewart, T. R., & Moninger, W. R. (1992). Effects of Improved Information on the Components of Skill in Weather Forecasting. ORGANIZATIONAL BEHAVIOR AND HUMAN DECISION PROCESSES 53, 107-134 (1992).

Studies, J. o. (2019). Influence of Culture on Investment Decisions: A Cross-Sectional Study of Ghanaian Population. Bonna, Adu K;Awobgo, Robert;.

Trinugroho, I., & Sembel, R. (2011). Overconfidence and Excessive Trading Behavior:An Experimental Study. International Journal of Business and Management.

Tversky, A., & Kahneman, D. (1980). Toward a positive theory of consumer choice. Journal of Economic Behaviour & Organization.

Tversky, A., & Kahneman, D. (1991). Loss Aversion in Riskless Choice: A Reference-Dependent Model.

Van Rooij, M., & Annamaria, L. (2011). Financial literacy and stock market participation. Journal of Financial Economics.

Zaidi, F. B., & Tauni, M. Z. (2012). Influence of Investor’s Personality Traits and Demographics on Overconfidence Bias. INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS.

Downloads

Published

2024-07-25

How to Cite

Sharma, P., & Agnihotri, M. (2024). A Study of Factors Affecting the Investment Behaviour of Individuals: A Systematic Literature Review. Journal of Academic Advancement, 3(01), 1–14. Retrieved from https://jaa.kbsaa.org/index.php/j/article/view/38

Issue

Vol. 3 No. 01 (2024): Jan-Jun

Section

Research Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Research Articles in 'Journal of Academic Advancement' are Open Access articles published under the Creative Commons CC BY License Creative Commons Attribution 4.0 International License http://creativecommons.org/licenses/by/4.0/. This license allows you to share – copy and redistribute the material in any medium or format. Adapt – remix, transform, and build upon the material for any purpose, even commercially.