Factors Affecting Overconfidence Of Opportunistic Investors In Malaysia

Abstract

The main objective of the research is to determine the factors that affecting overconfidence of opportunistic investors in Malaysia. The authors examined the traits of overconfidence and opportunistic investors in a more specific way. The research is conducted by using SPSS (Statistical Package for Social Science) and it is completed by using primary data, data collections are distributed through questionnaire. The data was collected through different range of individual to enhance our result of studies. Mainly, the respondents who meet the criteria of overconfidence. Most of the age range 18-24, opportunistic investors in Malaysia are encountering in overconfidence because they reveal certain psychological biases when timing their investment decisions. Overconfidence that affected by over-optimism, hindsight bias, self-attribution and individual traits. As overconfidence will leads to higher trading volume that causes in reducing of returns, opportunistic investors should be educated on how to trade in the stock market. In brief, if investors had taught a correct way of investment and perfect knowledge on how to analyse information, trading in stock market in a frequent way can lead to higher gain on investment. This study concludes the factors of affecting the overconfidence of opportunistic investor and how they believe in they can beat the market and earns an abnormal return.