Research into the Influencing Factors That Affecting Investment Decision Making
Research Aims and Objectives
The current research investigates the influencing factors that affect investment decision-making processes. The study focuses on how the psychological factors mentioned affect the investment decisions made by an investor. Prospecting decision-making effects will explain the state of mind associated with individual decision-making processes, including loss aversion, mental accounting, and regret. Hence an investor can evaluate their investment performance besides the satisfaction of their investment decision.
The pricing of the traded assets is also affected by these factors. The objectives set in this topic include:
1. To evaluate how traded asset prices are influenced by psychological factors including fear, prospect, anxiety, and uncertainty.
2. To determine whether the psychological factors can be the drivers of making investment decisions.
3. To determine the degree to which the psychological factors impact investment decision-making.
Research Questions
How can one set the traded asset prices?
What are the primary disadvantages of psychological factors in an investment portfolio?
What are the effects of overconfidence and anchoring behavior on investment decisions?
Interview Questions
There are three main psychological factors including fear, uncertainty, and prospecting which often influence investment decision. Explain how each of the factors can affect your investment decision.
Which factor among the three highly affects your investment decision? Explain.
Apart from psychological factors, are there any personal, financial, or environmental factors that influence your investment decisions? If yes, explain.
What factors do you consider when setting prices of traded assets? Explain.
How do changes in share price affect your investment decisions?
What are problems posed by overconfidence in investment decision-making process?
Anchoring behavior where individuals use historical data as basis for investment is a common practice. Do you think it is an effective way of developing investment decisions? Explain.
