Investment Decisions – A Study On Behavioral Factors and Financial Well-Being

Abstract

The research examines the extent to which financial well-being and behavioural factors impact investors' decision. Its objectives are to explore perceived financial well-being, examine behavioural factors affecting investment choices, determine the role of financial well-being on behaviour, and its mediating role. Primary and secondary data were used. Primary data was collected through a standardized questionnaire used to survey 122 individual investors using convenience and snowball sampling, and secondary data collected from journals and articles. Statistical analysis included descriptive analysis, regression, and mediation analysis. Findings showed that behavioural biases such as overconfidence and loss aversion greatly impacted investment decision, with financial well-being mediating to a certain extent. Investors attribute losses to market volatility, not bad luck, and prefer equity investment with short-term and long-term balanced approaches. While many are financially secure and confident in managing emergency needs, financial control is moderate. The research finds that there is a need for specialized financial education, particularly among Generation Z, to rectify behavioural biases, diversify investment, and develop long-term investment. The research finds that enhancing financial literacy, bias awareness, diversification, and developing a long-term investment culture is the way to optimal financial decision-making. Youth investors can have their investment confidence and ability enhanced by means of exclusive youth investment schemes, which result in enhanced financial stability and well-being.