Behavioral Aspects of Individual Investors for Investment in Bangladesh Stock Market

Abstract

The main objective of this study was to develop a framework about behavioral aspects of individual investors for investment in the stock market of Bangladesh. In the field of general information, we found that peoples had significant years of experience. Majority of the population came in the market on their self interest. People invested in the market to increase their capital. People adopted mixed strategy in financing. Most of the investors were small size in capital. Majority of the respondents were willing to buy in the bearish market. Majority of the investors were continuous in trading and they did not like to stay away from investment. They had collected information from multiple sources. In the field of firm’s image, we found that business performance, reputation of the firm, firm’s status, feelings for a firm’s product and services, firm’s involvement in solving community problem influence investor’s decision. Investors were also influenced by firm’s ethical operations. Investor’s decision was significantly influenced by the firm’s accounting information like EPS, financial statement, DPS, expected dividend, past performance etc. A very good percentage of investors were regularly reading the articles published in the daily newspaper, collected information from internet, TV talk show. Money market conditions also influenced investor’s decision. Individual investor’s decision was strongly affected by advice of brokers, friends and family. Affordable price, positive movement, ease of obtaining borrowed fund, past performance could also influence investment decision.