Psychological and Economic Factors Affecting Investment Strategies of Individual Investors in Lucknow City, India

Abstract

Purpose: The purpose of this research is to identify various social and economic factors that contribute to investment decision-making.

Theoretical Framework: As employment opportunities and economies grow, investment decisions become more important. To invest is to put money into assets with the expectation of a positive return later. The study was performed from the standpoint that people are now able to save and invest their money for returns because they are aware of various investment opportunities. Although retail investors' increasing presence is important, their lack of expertise and foresight frequently leads to poor investment decisions. Understanding the causes of market irrationality amongst investors is of utmost importance to academicians, investors, and portfolio managers. It is crucial to investigate investors' mental processes, perspectives, difficulties, and roadblocks as their judgements are hampered by several biases and external variables.

Design/methodology/approach: This research is limited to small-scale investors in the state of Uttar Pradesh (India). For this research, primary data from 450 respondent has been collected by using a structured questionnaire. Statistical tools like Mean, Correlation, Cross tabulation, Chi-square been used for analysis.

Findings: The findings of this study imply that an individual retail investor should invest his or her valuable assets to develop new assets by using a variety of tactics in order to avoid losses.

Conclusion and recommendation: This study conclude that a variety of economic factors and social factors have an influence on the manner in which an individual investor is prepared to spend their money in order to produce return in the future.