The Psychology of Risk Influence and Investor Sentiment on Investment Decision Making in the Indonesian Stock Market

  • Muhammad Apri Wirawan Sinaga Faculty of Administrative Sciences, Universitas Brawijaya, Indonesia
  • Nila Firdausi Nuzula Faculty of Administrative Sciences, Universitas Brawijaya, Indonesia
  • Cacik Rut Damayanti Faculty of Administrative Sciences, Universitas Brawijaya, Indonesia

Abstract

This study aims to provide empirical evidence concerning the influence of risk psychology and investor sentiment on investment decision-making. The focus of this research is individual investors in Malang, who participate in the Indonesian stock market. Data collection was conducted from December 2022 to February 2023, utilizing a proportionate stratified random sampling method. The sample size meeting the specified criteria was 100 respondents, whose data was subsequently analyzed using variance-based structural equation modeling, commonly referred to as SEM-PLS. The findings suggest that risk psychology has a positive, albeit insignificant, effect on investment decision-making. However, risk psychology significantly influences investor sentiment, which in turn has a substantial and positive effect on investment decision-making. The study also provides empirical evidence of a robust indirect effect of risk psychology on investment decision-making.


Keywords: psychology of risk, investor sentiment, investment decision


 

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Published
2023-07-30
How to Cite
SINAGA, Muhammad Apri Wirawan; NUZULA, Nila Firdausi; DAMAYANTI, Cacik Rut. The Psychology of Risk Influence and Investor Sentiment on Investment Decision Making in the Indonesian Stock Market. Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 18, n. 2, p. 197-215, july 2023. ISSN 2303-1018. Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/99681>. Date accessed: 02 nov. 2024. doi: https://doi.org/10.24843/JIAB.2023.v18.i02.p01.
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Articles