Factors Affecting Stock Investment by Individual Investors on the Indonesia Stock Exchange

ABSTRACT : This study aims to examine the factors that influence individual investors in investing in stocks on the Indonesia Stock Exchange. The factors studied and suspected of influencing individual investor decisions are financial literacy, risk perception and herding behavior. The study also examines the effect of financial literacy on risk perception. The population in this study were college students in Yogyakarta who had invested in the Indonesia Stock Exchange. Respondents were focused on students of the Islamic University of Indonesia with a total of 115 students taken using convenience sampling and snowball sampling techniques. To test the hypothesis, the researcher used a structural equation model analysis tool with the Smart PLS program. The results of the study indicate that financial literacy, risk perception have a positive effect on investment decisions. However, herding behavior does not affect investment decisions, while financial literacy also affects risk perception.