The Power of Financial Literacy in Shaping Individual Investors' Investment Choices

Abstract

The behavioral factors that impact individual investor decision making is considered to be among the research concern in the world of behavioral finance. The main purpose of this study is to find out, that how in Pakistan stock exchange (PSX) individual investor while making the investment decision get affected by various behavioral determinants. Aim of this study is to identify, among all these biases which effect the Investment decision more and to use the results for the betterment of existing knowledge of discipline.  Data in this regard is collected through a questionnaire adapted from prior studies as it is satisfying the current scenario for industry settings in Pakistan. Research design used in this study is quantitative cross sectional. Results of this study will help in assisting individual investors, wealth managers, advisors and companies registered in Pakistan stock exchange.  Factors that impact investor’s investment performance are crucial, as these will directly affect their financial plans of future. Practically it help the investors who desires to invest should incorporate the said behavioral determinant for the precise valuation of the stocks and in making wise future investment decisions. This will make ease for individual investor in understanding the decision making process, which will result in optimal and rational decision making.