The Role of Herding Behavior as a Moderating Variable on the Influence of Financial Literacy and Risk Tolerance on Students' Investment Decisions

This study aims to examine the effect of Financial Literacy and Risk Tolerance on investment decisions, with Herding Behavior as a moderating variable. The increase in young investors, among students with limited knowledge and experience, raises questions about the factors that influence their investment decisions. This research employs a quantitative approach with a purposive sampling method targeting students of the Faculty of Economics, UIN Maulana Malik Ibrahim Malang, class of 2021. Respondents were selected based on several criteria collected from distributing questionnaires, followed by data examination employing the Structural Equation Modeling Partial Least Squares (SEM-PLS) method. The results showed that Financial Literacy and Risk Tolerance have a significant positive effect on investment decisions. However, Herding Behavior is not proven to significantly moderate the relationship between Financial Literacy and investment decisions, as well as the relationship between Risk Tolerance and investment decisions.