Investors attitudes towards investment in financial securities
Capital markets are an essential part of modem economics and they drive savings mobilization. Shareholders are key players in the process. An understanding of their behaviour and attitudes towards investing in the securities market is the main focus of this study. In recent years, examples of market inefficiency in the form of anomalies and irrational investor behavior have been observed more frequently (Kahneman and Tversky's, (1991).lt appears that financial analysts have not fully understood the way in which psychological factors affect the investors' decision making, hence the reason for market inefficiencies. The purpose of this study is to analyze investors' attitudes towards investment in securities. Specifically, the objectives of the study are; the impact of company performance and socioeconomic environment on investors' attitudes, the extent to which financial risk affects investors' attitudes and the extent that informational needs affect investment decision making. Behavioural finance will provide the fundamental theoretical framework for this study. The empirical research is based on a questionnaire directed towards individual investors in Kenya, more specifically investors of Kenya Airways Limited. The study design is survey method for which the population constituted 75,531 individual investors. It was found that shareholders in the 36-50 years age bracket dominate the shareholding population. The results indicate that most shareholders invest in high earning companies and take into account the kind of business the company does before investing. They expect high dividends and claim that they do not receive adequate dividends for their investments. Stock brokers play a key role in the trading of shares. However, though services provided by brokers are good value for money, investors feel they are not fully knowledgeable about investment decision making. Therefore the securities industry should be doing more to educate investors on good investment decisions. Further, the stock market is considered by majority of shareholders as a safe place to invest in. Investors are, however concerned about the market volatility and the fear of losing their money. A more understanding of the factors affecting investors decision making would enhance today's financial markets.