How Investment Behaviour of Young Investors? A Case Study on The Indonesia Stock Exchange

Abstract

This research aims to dig deeper into the investment behavior of young investors on the Indonesian Stock Exchange. This research was conducted in Bali Province, especially the Denpasar City area. The sample was determined using convenience sampling with a total sample of 180 young investors, namely the millennial generation and generation z in Denpasar City. Data was obtained directly from distributing questionnaires via Google Form. The data analysis technique used is SEM-PLS analysis. The research results show that, 1) herding behavior effect investment decision making, 2) heuristic bias has no effect on investment decision making, 3) anchoring bias effect investment decision making, 4) the level of overconfidence an investor has will improve the investment decision making process , 5) herding behavior does not have a significant effect on the level of overconfidence, 6) heuristic bias can increase the level of overconfidence, 7) anchoring bias can increase the level of overconfidence, 8) overconfidence cannot increase the effect of herding behavior to improve investment decisions, 9) overconfidence can increasing the effect of heuristic bias to improve investment decisions, and 10) overconfidence can increase the effect of anchoring bias to improve investment decisions. Future researchers can further examine overconfidence in mediating the effect of herding behaviours on investment decision making, and the effect of heuristic bias on investment decision making. Young investors in Denpasar City are advised to increase their knowledge and investment skills in the capital market to reduce the risk of bias in making investment decisions.