Authors: Rushikesh Vasudev Patil, CS Jaymala Katkar
Abstract: This research examines the different elements that affect individual investors when making investment decisions. The study will utilize a descriptive research design and will be complemented by data gathered from pertinent secondary literature, in addition to primary data collected from 100 participants via a structured questionnaire. Employing descriptive statistical analysis techniques, such as mean and standard deviation, will allow the study to investigate how demographic, economic, behavioral, and financial literacy factors impact investment decisions. The study's results show that demographic factors like age, income, and education have a significant effect on investment behavior, as participants from various backgrounds exhibit differing risk appetites and preferences. It is also observed that while interest rates influence investment decision making to a relatively low degree, economic factors, especially income level, inflation, market conditions, and tax advantages significantly impact investment choices. Behavioral and psychological influences significantly influence investor choices in that market trends, fear of losses, peer pressure, and self-confidence significantly influence investment decision-making processes. Further, it is also evident that financial understanding and literacy play a huge role in investing decision making. Those who have high levels of financial literacy will usually keep track of their investments, consult with financial experts, and make the right decisions. However, it has been seen that not all investors perform proper risk analysis before making any investment decisions. Generally, this study concludes that factors that lead to investment decisions are behavioral and rational, and increasing financial awareness could result in sensible investment decisions.
