Investment Behavioral Biases in Indonesia Millennial Investors Behavior during Pandemic
DOI:
Abstract Views:
482 times
PDF Downloads:
440 times
Abstract
Purpose: Digital financial inclusion era has brought Indonesian people to gain interest in financial sector by accessing more resources to financial literature. During Covid-19 Pandemic, there was a unique phenomenon occurred where the price was going down but the number of individual investors, dominated by millennial, was increasing. This paper aimed to examine the behavioral biases that may influence Indonesian millennial investors during investment decision making process. The main focus is examining possibility of given effects from overconfidence, disposition effect, and loss aversion of the Indonesian millennial investors to investment decision making during Covid-19 Pandemic, by also examining the mediating effect for financial literature.
Method: Using purposive sampling, a total of 1,035 valid respondents were collected using Google Form questionnaire. Structural Equation Modeling (SEM) analysis was conducted as the quantitative chosen method to examine the condition.
Result: Overconfidence, disposition effect, and loss aversion are proven to positively affect investment decisions for Indonesian Millennial Investors during Covid-19 Pandemic. Additionally, financial literature is also proven to receive the mediating effect from overconfidence to investment decision, over all other independent variables. This study is believed to broaden the investment insight, especially in terms of investment decision making process and behavioral bias.
Downloads
References
Ahmed, R., Riaz, S., Aqdar, R., & Hassan, S. (2021). The Relationship Among Overconfidence, Economic Expectation, Social Factors, and Investment Decision Making Behavior with the Mediating and Moderating Effects. Journal of Contemporary Issues in Business and Government, 27 (2), 1076.
Bouteska, A., & Regaieg, B. (2020). Loss Aversion, Overconfidence of Investors, and Their Impact on Market Performance Evidence from the US Stock Markets. Journal of Economics, Finance, and Administrative Science, 25(50), 451-468.
FATF. (2021). FATF’s Focus on Financial Inclusion: Protecting the Integrity of the Global Financial System. Retrieved from http://www.fatfgafi.org/publications/fatfgeneral/documents/fatfsfocusonfinancialinclusionprotectingtheintegrityoftheglobalfinancialsystem.html -
Gill, S., Khurshid, M. K., Mahmood, S., & Ali, A. (2018). Factors effecting investment decision making behavior: The mediating role of information searches. European Online Journal of Natural and Social Sciences, 7(4), 758-767.
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision Under Risk. Journal of Econometric Society, 47(2), 263-291.
KSEI. 2021. Statistik Pasar Modal Indonesia Januari – Desember 2021.
Kasoga, P. S. (2021). Heuristic biases and investment decisions: multiple mediation mechanisms of risk tolerance and financial literacy—a survey at the Tanzania stock market. Journal of Money and Business, 1(2), 102-116. https://doi.org/10.1108/JMB-10-2021-0037
Markowitz, H. (1952). The utility of wealth. Journal of political Economy, 60(2), 151-158.
Mouna, A., & Jarboui, A. (2015). Financial Literacy and Portfolio Diversification: An Observation from the Tunisian Stock Market. International Journal of Bank Marketing, 33(6), 808-822.
Nareswari, N., Balqista, A. S., & Negoro, N. P. (2021). The The Impact of Behavioral Aspects on Investment Decision Making. Jurnal Manajemen dan Keuangan, 10(1), 15-27.
Oreng, M., Yoshinaga, C. E., & Eid, W. (2021). Disposition effect, demographics and risk taking. RAUSP Management Journal, 56, 217-233.
Shefrin, H. (2002). Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing. New York: Oxford University Press.
This work is licensed under a Creative Commons Attribution 4.0 International License.
The journal allow the authors to hold the copyright without restrictions and allow the authors to retain publishing rights without restrictions.
