| dc.description.abstract | Investment decisions are usually influenced by various behavioural factors. The assumption is that herding, prospecting and heuristics
influence personal investment decisions among investors in the stock market. The main objective of this study was to analyze the
behavioral factors influencing investment performance of individual investors in Nairobi Security Exchange. The specific objectives
of the study were; assess whether the following factors-herding, prospect (loss aversion, regret aversion, and escalating the
commitment), heuristic (availability bias and overconfidence) and investment decisions-are significantly correlated with each other in
the NSE and establish whether the following behavioural factors-herding, prospect (loss aversion, regret aversion, and escalating the
commitment) and heuristic (availability bias and overconfidence) combined together significantly influence the investment
performance in the NSE. The investigator hypothesized that H01: The following behavioral factors-herding, prospect (loss aversion,
regret aversion, and escalating the commitment) and heuristic (availability bias and overconfidence) and investment decisions-are not
significantly correlated with each other in the NSE and H02: the following behavioural factors-herding, prospect (loss aversion, regret
aversion, and escalating the commitment) and heuristic (availability bias and overconfidence) combined together do not significantly
influence the investment performance in the NSE. In order to achieve the set objective, the investigator adopted survey research
design targeting 1,196,995 individual investors in Nairobi Securities Exchange. The Slovin’s formula was used to estimate the 400
sample size of a population whereas the researcher took the high limit of 500 individual investors in Nairobi Securities Exchange.
Structured questionnaire was used to collect primary data. The study established that loss aversion and overconfidence behaviour was
displayed by the individual investors at a high level. The researcher recommends that The individual investors should be encouraged
to avoid the influence of loss aversion. Instead, they should rely on fundamental analysis of the stocks to make decisions. | en_US |
