Authors: Zaheer Ahmed and Umara Noreen

Research Article

Year: 2021, Volume 21 Number 2

Pages: 48 – 62


Investment decision-making is the process of identifying decisions, collecting relevant information, and making informed choices. This study unfolds the behavioral determinants which affect the investment decision-making behavior of equity investors. A survey was conducted on a sample of 384 registered individual investors of the Pakistan Stock Exchange (PSX). The impact of behavioral determinants, including heuristics, herding effect, and market variables on investment decision-making behavior, was measured through structural equation modeling. The analysis outcomes indicated a positive and significant impact of behavioral determinants on investment decisions. Hence, heuristics, herding effects, and market variables have strong and significant roles in making educated and informed decisions. The present study proposes multidimensional functional insights for academicians, money and mutual fund managers, stockbrokers, and investment advisors to comprehend the determinants, which are important for the investment decisions of equity investors. 

Keywords: heuristics, herding effect, market variables, investment decision making, Pakistan Stock Exchange (PSX)