Decision making behavior of Malaysian investors: the influential factor / Nurazleena Ismail and Prof Madya Dr Nik Maheran Nik Muhammad

Malaysian capital market offers an array of investment products in a form of shares, loan stocks, bonds, warrants, and unit trusts. The type of products chosen by an investor to commit his capital depends largely on his financial goals, time frame, and amount of capital available. Different
people invest with different strategies or even no-strategies. However, previous studies found that most individual investors who play the stock market often ask for 'hot tips' that will enrich them overnight. Too often investors buy stocks on a whim or on the recommendation of a stranger when they should buy stocks that are showing fundamental strength and consistence with their investment objectives. Therefore, the main objective of this research is to study factors that influence investors' investment decision making. Do them rational or irrational in their decision making behavior. The population for the study consists of individual investor who trade share at Bursa Malaysia. 147 questionnaires were distributed and usable. The results from correlation analysis indicate positive and significant correlations among the independent and the
dependent variables. However, multiple regression analysis shows significant relationships only exist for technical analysis, company analysis and frame of references indicating that Malaysian investors rely both on fundamental analysis as well as following others opinion (herding). In other words, they are partially rational in their decision making.