A Survey of the Factors Influencing Investment Decisions: The Case of Individual Investors at the NSE
Jagongo, A. O.
Mutswenje, V. S.
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Individual investments behaviour is concerned with choices about purchases of small amounts of securities for his or her own account. Investment decisions are often supported by decision tools. It is assumed that information structure and the factors in the market systematically influence individuals’ investment decisions as well as market outcomes. The objective of the study was to establish the factors influencing investment decisions at the Nairobi Stock Exchange. The study was conducted on the 42 investors out of 50 investors that constituted the sample size. To collect data the researcher used a structured questionnaire that was personally administered to the respondents. The questionnaire constituted 28 items. The respondents were the individual investors. In this study, data was analyzed using frequencies, mean scores, standard deviations, percentages, Friedman’s test and Factor analysis techniques. The researcher confirmed that there seems to be a certain degree of correlation between the factors that behavioral finance theory and previous empirical evidence identify as the for the average equity investor. The researcher found out that the most important factors that influence individual investment decisions were: reputation of the firm, firm’s status in industry, expected corporate earnings, profit and condition of statement, past performance firms stock, price per share, feeling on the economy and expected divided by investors. The findings from this research would provide an understanding of the various decisions to be made by investors based on the prevailing factors and the eventual outcomes for each decision and would identify the most influencing factors on the company’s investors’ behavior on how their future policies and strategies will be affected since investment decisions by the investors will determine the company’s strategy to be applied.