Financial literacy and investment decision making applying behavioral finance concepts / Au Yong Hui-Nee, Xiao-Xian Alan Tan and Jin-Yang Tan

Investing is a difficult task for many people, especially who has lack financial education on investment. They may make an unwise decision that the risk of loses will be greatly increased. Therefore, the government have introduced the financial education programs to improve financial education among Malaysians and promote informed investment decision-making. In this study, it aims to assess factors that influence investment decision making of individual investors. There will be seven (7) independent variables derived from financial literacy and behavior finance concepts, i.e., Financial Literacy (FI), Investment Sentiment (IS), Over Confidence (OC), Risk Tolerance (RT), Saving Habit (SH), Self-Attribution Bias (SAB) and Social Influence (SI). This study applied a primary data approach to collect data from the individual investors. The data was analysed using SPSS statistics software package. Once the survey instrument was developed, the survey questionnaire was used for a pilot test. Initially, reliability test will be conducted. Then, descriptive analysis and multiple regression analysis. Financial Literacy (FI), Investment Sentiment (IS), and Social Influence (SI) were found significant at 1% significance level, while Saving Habit (SH) was found significant at 10% significance level. The study considered seven explanatory variables, of which there might be other variables which will contribute to the individual investors’ investment decision making. The findings of this study may be beneficial to individual investors in determining investments that will best serve their investing objectives by taking into consideration the relevant behavioral elements. This study reveals details about the behavioral factors that influence investors' decisions in making investments. Therefore, financial advisors may become even more crucial in advising individual investors. Applying the behavior finance concepts, this study focuses on investors who are generally digital native in determining the investment decision.