Interrelations of investment Experience and Investment Decision, The Mediating Role of Financial Literacy - A Study of Investors’ Behaviour at Indian Stock Market

As the market volatility becomes more common today, the need for informed decisions becomes more prominent.Lack of investment experience and absence of financial literacy might significantly jeopardize the quality of investment decisions.This study aims at examining the relationship between two variables such as investment experience and investment decision-making alongside the role of financial knowledge of the individual investors on their decisions.A structured questionnaire was served on 1000 randomly selected individuals across the four regions of India who have been investing for the last one year or more through ten broking agents having pan India presence.Responses received from 518 individuals were analysed using statistical tools like mean, correlations and regression analysis.Sobel test was applied to trace the mediating role of financial knowledge.The study concluded that both investment experience and financial knowledge play significant positive role in the investment decisions.Financial knowledge does impact the investment behaviour of the investors positively.Both financial knowledge and experience together are very much needed to avoid various cognitive and emotional behavioural biases.This study also gives a direction for providing retail investors and students opportunities to learn the nuances of financial concepts before they engage in investment in the secondary market.