Bridge over ocean
1 July 1994 Financial Analysts Journal Volume 50, Issue 4

Factors Influencing Individual Investor Behavior

  1. Robert A. Nagy
  2. Robert W. Obenberger
Previous studies of retail investor behavior have examined motivation from economic perspectives or studied relationships between economic and behavioral and demographic variables. Examination of the various utility-maximization and behavioral variables underlying individual investor behavior provides a more comprehensive understanding of the investment decision process.These variables can be grouped into seven summary factors that capture major investor considerations. Data collected from a questionnaire sent to a random sample of individual equity investors with substantial holdings in Fortune 500 firms reveal that individuals base their stock purchase decisions on classical wealth-maximization criteria combined with diverse other variables. They do not tend to rely on a single integrated approach.
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