MST-Commerce

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Browsing MST-Commerce by Author "Nkoroi, Elizabeth Karimi"

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    Behavioural attributes and performance of securities held by individual investor in Isiolo County, Kenya
    (Kenyatta University, 2024-07-30) Nkoroi, Elizabeth Karimi
    This study explores the relationship between behavioral attributes and the performance of securities held by individual investors in Isiolo County, Kenya. In the realm of behavioral finance, understanding how psychological biases and decision-making patterns influence investment outcomes is of paramount importance. The research objectives include assessing the impact of behavioral attributes, such as risk tolerance, overconfidence, and loss aversion, on the performance of securities in a local context. The main objective of this study was to explore the effect of behavioural attributes on performance of securities held by individual investors’ in Isiolo County, Kenya. To achieve these objectives, a mixed-methods approach was employed, combining quantitative analysis with qualitative insights. Data on individual investors' behavioral attributes were gathered through surveys and interviews, while the performance of securities was assessed using common metrics such as returns, risk-adjusted performance, and portfolio volatility. The research analyzed the collected data, employing statistical techniques to examine correlations and patterns. This study adopted a descriptive research design by deriving hypotheses from the theories that are existing. Bartlett’s test of Sphericity with a probability less than 0.05 was employed to test the hypotheses. A closed-ended questionnaire was used to gather primary data. SPSS was used to analyse the data with Factor analysis determining the relationship between independent variables (herding variables, market variables, prospect variables and heuristic variables) and the dependent variable (individual investor decision – making in the NSE); and to test the hypotheses. The results indicated that most of the behavioural attributes affecting the performance of securities held by individual investors had moderate impacts while market factors have a high influence on performance The study established that there is a significant relationship between the market, prospect and heuristics variables and performance of securities held by individual investor by failing to reject three null hypotheses. On the other hand, one null hypothesis was rejected thus concluding that there is no significant relationship between herding variables and performance of individual held. Preliminary findings suggest that behavioral attributes play a significant role in influencing investment decisions and outcomes among individual investors in Isiolo County. The research sheds light on the interplay of cognitive biases, emotional responses, and financial performance, providing valuable insights for both investors and financial professionals. The implications of this study are discussed, offering recommendations to enhance individual investors' financial decision-making in this region and beyond. The contribution of this study to the behavioral finance is that it has provided an understanding of the impact of behavioral attributes on investment performance, particularly in the unique context of Isiolo County, Kenya