The Impact of Behavior Biases on Investor Decision Making Regarding Financial Securities

Abstract

Investor’s irrationality is an inevitable truth that has been over and over highlighted by using researchers [1]. Consequently, this look at is any other effort to assess the role of behavioral biases in financial choice making in Pakistan stock alternate (PSX). A survey questionnaire is designed and used to acquire responses the use of convenience sampling approach from pattern of 184 investor of PSX. Behavioral biases encompass overconfidence, anchoring, disposition, representativeness and availability bias impact of traders. Multiple regression models are used to check impact of five behavioral biases on investment decision. We want to test whether or not those biases overconfidence, anchoring, disposition, representativeness and availability bias effect have significant effective impact on investment decision or not. Primarily based on effects we conclude that whether or not there are lots adjustments in investment decision is because of behavioral biases. This look at will help financial advisors to better recommendation their customers. The only way to reduce these biases can be education and education of traders.