JournalsKart submission@journalskart.com 8882640642, 011-43101010
Register Login
Volume 14 Issue 1 & 2 January-December 2023
IITM Journal of Management and IT |Articles

The Investment Journey of Individual Investor in the Capital Market: A Qualitative Study

Ms. Komal Khatri
View PDF Volume 14 Issue 1 & 2 January-December 2023 10.65301/iitm.2023.14.2.446 ↗
Ms. Komal Khatri . (2023). The Investment Journey of Individual Investor in the Capital Market: A Qualitative Study. IITM Journal of Management and IT, 14(2), 56-70.
Published by
Article outline
Article info

Abstract

This study explores the investment journey  of individual investors in the Indian capital market.  investment decision-making in the uncertainty of  the Indian capital market is a complex process. for  example, investors need to choose scripts based on  stock price movements, fundamental and technical  charts, future outcomes, current stage of the market,  etc. using immediate information. The returns from  investments are based on these complexities in the  market. The main aspects of this paper are what  prompt investors to invest in the capital market, type  and source of investment advice, investors selection  criteria, investors experience, presence of behavioural  biases, and investors’ understanding about the capital  market. Methodology: The researcher has used a  semi-structured approach of qualitative research for data collection. The sample size of this study is eleven investors with at least one year of investment experience in the capital market. The data has been  analysed using the thematic analysis approach to  find the themes. However, the research has used the  manual approach of data collection to generate codes  and themes. Findings: The results of this shows the  presence of behavioural biases in investment decision making. It also shows an understanding of the Indian  capital market, selection criteria of the investors, type,  and source of advice investors seek before investment.  Limitation: i) this study has taken the small size of  eleven investors (n=11). ii) the geographic area is restricted to Delhi only. Future Implications: the study  can be conducted with a large sample size taken from  the different geographic areas. The adoption of different  cultures across different countries can be studied to  find more generalizations of the results. Implications: 
i) This study provides guidelines to new investors’ in  designing their investment portfolio.

ii) This study provides a framework of investments in the capital  market.

iii) It conveys the policymaker to improve the  investment habits of Indian investors in the Indian  capital market.

Keywords

Investment Decisions Individual Investor Indian Capital market semi-structured interview method

References

  1. Ahmad, Z., Ibrahim, H., & Tuyon, J. (2017). Institutional investor behavioral biases: Syntheses of theory and evidence. Management Research Review, 40(5), 578–603. https://doi.org/10.1108/MRR-04-2016-0091
  2. Barber, B. M., & Odean, T. (2013). The behavior of individual investors. In Handbook of the Economics of Finance (Vol. 2, pp. 1533–1570). Elsevier. https://doi.org/10.1016/B978-0-444-59406-8.00022-6
  3. Boda, J. R., & Sunitha, D. G. (2018). Investor’s psychology in investment decision making: A behavioral finance approach.
  4. Bogan, V. L. (2013). Household investment decisions and offspring gender: Parental accounting. Applied Economics, 45(31), 4429–4442. https://doi.org/10.1080/00036846.2013.788782
  5. Chen, G., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2007). Trading performance, disposition effect, overconfidence, representativeness bias, and experience of emerging market investors. Journal of Behavioral Decision Making, 20(4), 425–451. https://doi.org/10.1002/bdm.561
  6. DeBondt, R. T. Financial decision-making in markets and firms: A behavioural perspective.
  7. DeBondt, W. (1998). A portrait of individual investor. Behavioural Economics.
  8. Fama, E. F. (1970). Efficient capital markets: A review of theory and empirical work. The Journal of Finance, 25(2), 383. https://doi.org/10.2307/2325486
  9. Glanville bin Mohamad, S. G., & Perry, C. (2015). How fund managers in Malaysia make decisions. Qualitative Research in Financial Markets, 7(1), 72–87. https://doi.org/10.1108/QRFM-09-2013-0028
  10. Guest, G., Bunce, A., & Johnson, L. (2006). How many interviews are enough? Field Methods, 18(1), 59–82. https://doi.org/10.1177/1525822X05279903
  11. Jagongo, A., & Mutswenje, V. S. (2014). A survey of the factors influencing investment decisions: The case of individual investors at the NSE. International Journal of Humanities and Social Science, 4(4).
  12. Jaiyeoba, H. B., Adewale, A. A., Haron, R., & Che Ismail, C. M. H. (2018). Investment decision behaviour of Malaysian retail investors and fund managers. Qualitative Research in Financial Markets, 10(2), 134–151. https://doi.org/10.1108/QRFM-07-2017-0062
  13. Jaiyeoba, H. B., & Haron, R. (2016). A qualitative inquiry into investment decision behaviour of Malaysian stock market investors. Qualitative Research in Financial Markets, 8(3), 246–267. https://doi.org/10.1108/QRFM-07-2015-0027
  14. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263. https://doi.org/10.2307/1914185
  15. Kaustia, M., & Knüpfer, S. (2008). Do investors overweight personal experience? The Journal of Finance, 63(6), 2679–2702. https://doi.org/10.1111/j.1540-6261.2008.01411.x
  16. Kumar, S., & Goyal, N. (2015). Behavioural biases in investment decision making: A systematic literature review. Qualitative Research in Financial Markets, 7(1), 88–108. https://doi.org/10.1108/QRFM-07-2014-0022
  17. Bogan, V. L., Just, D. R., & Dev, C. S. (2013). Team gender diversity and investment decision-making behavior. Review of Behavioural Finance, 5(2), 134–152. https://doi.org/10.1108/RBF-04-2012-0003
  18. Maditinos, D. I., Šević, Ž., & Theriou, N. G. (2007). Investors’ behaviour in the Athens Stock Exchange. Studies in Economics and Finance, 24(1), 32–50. https://doi.org/10.1108/10867370710737373
  19. Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7(1), 77. https://doi.org/10.2307/2975974
  20. Masood, O., Aktan, B., & Chaudhary, S. (2009). Investment decision-making from a risk manager’s perspective. Qualitative Research in Financial Markets, 1(2), 106–120. https://doi.org/10.1108/17554170910975928
  21. Massironi, C., & Guicciardi, M. (2011). Investment decision making from a constructivist perspective. Qualitative Research in Financial Markets, 3(3), 158–176. https://doi.org/10.1108/17554171111176895
  22. McCluskey, T., Broderick, A., Boyle, A., Burton, B., & Power, D. (2010). Views about dividends. Qualitative Research in Financial Markets, 2(2), 80–99. https://doi.org/10.1108/17554171080000381
  23. Mushinada, V. N. C. (2020). Are individual investors irrational or adaptive? Journal of Behavioral and Experimental Finance, 25, 100243. https://doi.org/10.1016/j.jbef.2019.100243
  24. Özen, E., & Ersoy, G. (2019). Impact of financial literacy on cognitive biases. In Contemporary Issues in Behavioral Finance (pp. 77–95). Emerald Publishing. https://doi.org/10.1108/S1569-375920190000101007
  25. Pak, T.-Y., & Chatterjee, S. (2016). Aging, overconfidence, and portfolio choice. Journal of Behavioral and Experimental Finance, 12, 112–122. https://doi.org/10.1016/j.jbef.2016.10.003
  26. Qu, S. Q., & Dumay, J. (2011). The qualitative research interview. Qualitative Research in Accounting & Management, 8(3), 238–264. https://doi.org/10.1108/11766091111162070
  27. Shah, S. Z. A., Ahmad, M., & Mahmood, F. (2018). Heuristic biases in investment decision-making. Qualitative Research in Financial Markets, 10(1), 85–110. https://doi.org/10.1108/QRFM-04-2017-0033
  28. Shanmugasundaram, V., & Balakrishnan, V. (2010). Investment decision-making: A behavioural approach. International Journal of Business Innovation and Research, 4, 584–597. https://doi.org/10.1504/IJBIR.2010.035714
  29. Tijjani, B., Fifield, S. G. M., & Power, D. M. (2009). Appraisal of equity investments by Nigerian investors. Qualitative Research in Financial Markets, 1(1), 6–26. https://doi.org/10.1108/17554170910939937
  30. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases.
  31. Subrahmanyam, A., & Vyas, T. (2017). Rationality between traditional and behavioural finance. International Journal of Research – Granthaalayah, 5(6), 389–405. https://doi.org/10.29121/granthaalayah.v5.i6.2017.2048
  32. Ye, J. (2020). Investor irrational selection bias in stock market. Revista Argentina de Clínica Psicológica. https://doi.org/10.24205/03276716.2020.13
  33. Zahera, S. A., & Bansal, R. (2018). Do investors exhibit behavioral biases? Qualitative Research in Financial Markets, 10(2), 210–251. https://doi.org/10.1108/QRFM-04-2017-0028
Citation copied to clipboard