BEHAVIORAL BIASES IN INVESTMENT DECISIONS: THE ROLE OF RISK PERCEPTION AND FINANCIAL AWARENESS AMONG PAKISTANI INVESTORS

Abstract

Examining the psychological biases influencing investing preferences is the aim of this study. This study's main goal is to examine the psychological biases that influence investing decision. Additionally, this study investigates how risk perception & financial literacy affect investing decision-making. The results of the current research will help financial advisors choose which psychological aspects to concentrate on to improve client care. Additionally, it will help individual investors determine which psychological variables significantly influence their investment decisions along with how to avoid them so they may make better choices. Convenience sampling was used to collect the responses from the survey, which collects the data. Regression analysis and correlation are used to assess the ideologies and conceptual framework. The results demonstrated the influence of all three psychological biases on investment decisions. Additionally, examined and verified are the roles of financial literacy and risk perception. One of the study's limitations is that it solely focuses on three biases, despite the fact that many more could influence an investor's choice.