A qualitative inquiry into the investment decision behaviour of the Malaysian stock market investors

Jaiyeoba, Haruna Babatunde and Haron, Razali (2016) A qualitative inquiry into the investment decision behaviour of the Malaysian stock market investors. Qualitative Research in Financial Markets, 8 (3). pp. 246-267. ISSN 1755-4179

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Abstract

The main purpose of this study was to examine the investment decision behaviour of retail investors in Malaysia. The study adopted semi-structured interviews to solicit an understanding of six retail investors on investment decision behaviour in Malaysia. Content analysis technique was used to analyze the data and verbatim texts were applied in discussing the emergent themes. The findings indicate that retail investors in Malaysia are patriotic in nature and their investment decisions are based on feeling of comfort or convention rather than quantitative analysis. They rely so much on their findings rather than third party’s views for making investment decisions. They were influenced by the psychological biases as they herd on the information. Challenges are solved through experience and they believe that proper understanding of the financial and economic settings of the country can enhance better investment decision making. A more detailed investigation on the investors’ behaviour with more samples may expand our understanding of this issue. Future studies need to examine the investment decision behaviour with more samples. Firstly, it will prepare hit and run investors to be more ready to remain in the market and improve their skills on how to make sound investment decisions. Secondly, it helps the investors to know that knowledge of traditional finance theory is not sufficient to excel in stock market and hence, they need to know more about behavioural finance. Thirdly, investors are exposed to various reasons why investment decisions deviate from expected and different means of solving the challenges faced in making investment decision within the Malaysian context. Fourthly, investors are reminded that understanding the financial settings before investing is essential. Finally, policy makers in stock market are able to understand the retail investors’ behaviour.

Item Type:	Article (Journal)
Additional Information:	4581/51174
Uncontrolled Keywords:	Retail investors, behavioural finance, neoclassical finance, stock market, Malaysia
Subjects:	H Social Sciences > HG Finance > HG4501 Stocks, investment, speculation
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Razali Haron
Date Deposited:	20 Jul 2016 16:19
Last Modified:	13 Jun 2019 09:39
URI:	http://irep.iium.edu.my/id/eprint/51174

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