Determinants of Investment Decisions: A Study of Individual Investors on the Zimbabwe Stock Exchange

Peter Hunguru, Vusumuzi Sibanda, Ruramayi Tadu


This study investigated factors that inform individual investors in their decision-making on the Zimbabwe Stock Exchange. The main objective was to identify and assess the effect of the behavioural factors on investment decisions of individual investors. A quantitative survey of 291 randomly selected individual Zimbabwe Stock Exchange investors was conducted. Multiple regression analysis was used to calculate the correlation coefficient of behavioural factors and investment decision while correlation analysis was used to measure the strength of the relationship between the independent variables. The findings of the study established that the predictor variables had a strong positive association between them and individual investor decision at a significant level of 0.01 and 0.005. The findings of the study revealed that individual investor decisions are influenced by the behavioural factors which are; anchoring, availability, gambler’s fallacy, overconfidence, herding, loss aversion, mental accounting, regret aversion and representativeness. The study recommends the need for improved information on the stock markets dynamics as well as training on investor awareness programmes to support the decision-making abilities of the individual investors on the ZSE to fully play its rightful role in the development of the economy.

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Applied Economics and Finance    ISSN 2332-7294 (Print)   ISSN 2332-7308 (Online)

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