Bias Heuristics and Investment Decisions in Indonesian

English

Abstract

The purpose of this study is to investigate Bias Heuristics and Investment Decisions in Indonesian.we conducted a survey with questionnaires to 758 investors at various brokers by guaranteeing the confidentiality of their personal data on the Indonesian stock exchange.We use a questionnaire and a Likert scale for measurement and data collection with structural equation model (SEM) and confirmatory factor analysis (CFA).We found that risk tolerance has a significant positive effect on overconfidence. Financial knowledge is very important for investors in the stock market to avoid mistakes in making investment decisions. In Indonesia, financial literacy is still not rooted so it is negatively related to all variables.