Generation Y investment decision: an analysis using behavioural factors

TLDR

The study investigates how behavioural factors influence Generation Y investors’ decisions in Malaysia and aims to broaden understanding of their financial decision‑making. The authors surveyed 502 respondents, assessing five behaviours—trait anger, trait anxiety, overconfidence, herding, and self‑monitoring—to examine their impact on investment decisions. Results show that trait anxiety and overconfidence reduce investment decisions, while self‑monitoring increases them; trait anger and herding have no effect, and decision patterns differ by gender, employment status, and income allocation, with self‑employed individuals and those allocating 5–10 % of income showing marginally positive effects.

Abstract

Purpose This study aims to investigate the behavioural factors that affect individual investment decisions among Generation Y in Malaysia. Design/methodology/approach Five human behaviours such as trait anger, trait anxiety, overconfidence, herding factor and self-monitoring have been examined using a sample of 502 respondents. Findings The results reveal that trait anxiety and overconfidence are negatively related to investment decisions while self-monitoring is positively associated. Trait anger and herding behaviour do not significantly affect investment decision. The results also show that investment decision-making is significantly distinct when examined by gender, employment status and income allocation. Among these three variables, the result shows that only self-employed individuals and those in the 5–10 per cent income allocation group are marginally positive vis-à-vis investment decision-making. Originality/value The outcomes of this study will expand investors' knowledge about the financial decision-making process.