Retail Investor Behaviour Role in Equity Investment Decisions – An Impact Analysis

This study examines the impact of retail investor behavior on equity investment decisions, focusing on key behavioral factors like risk tolerance, return expectations, herd mentality, emotional bias, anchoring, and confirmation bias in global equity markets. Using a mixed-methods research design, data from 120 retail investors were collected through structured questionnaires and analyzed using neural networking and regression analysis. The findings reveal that emotional bias significantly influences investment decisions, often leading to irrational choices and increased risk. Confirmation bias was also identified as a key contributor to overconfidence and limited portfolio diversification, highlighting the need for investor education and objective financial advice. Additionally, the study found that increased risk aversion correlates with decreased interest in equity investments, emphasizing the importance of educating investors on realistic returns and long-term benefits. Lowered return expectations were also linked to reduced equity investment interest. In conclusion, the study supports the significant impact of behavioral factors on investment decisions, stressing the need for awareness, education, and strategies to counteract biases for better risk management and investment outcomes.