Investment Decisions: The Effect of Risk Perceptions and Risk Propensity for Beginner Investors in West Sumatra

DOI

10.2991/aebmr.k.211117.034How to use a DOI?

Keywords

Investment; investment decision; beginner investors; risk perceptions; risk propensity

Abstract

Investment decision is an activity carried out by the investor for investing their fund. For this reason, investors must consider many factors. Investor consider accounting information in investment decision. However, investor psychology, which is reflected by a personal signal, is more dominant in investment decision. Psychological factors will make investors hesitate in making investment decisions, because investors consider personal psychology compared to information from the public. This psychological phenomenon will result in the stock price may not reflecting its fair value. West Sumatra has 8 Investment Galleries, the largest number of which are located in Padang City which has 6 Investment Galleries. In the Investment Gallery, most investors are students. Students take irrational actions in making investment decisions. Student decisions are not always in accordance with financial theory, students have psychological factors (risk perception and risk propensity) in investment decisions making. So that the objects in this study are students. The purpose of this study was to examine and analyze: 1) the effect of risk perceptions on investment decisions; 2) the effect of risk propensity on investment decisions. This research is causative research. It seeks to explain the effect of risk perception (X₁), Problem and risk propensity (X₂) as an independent variable on investment decisions (Y) as the dependent variable. The method used in data collection is using primary data. Data collection are using a questionnaire. The population in this study were all beginner investors in West Sumatra. The sample criteria in this study are as follows: (1) the age of the respondent is at least 18 years old (2) all respondents have been or have become stock investors in West Sumatra. Determination of the number of samples in this study using the Slovin formula. The result showed that risk propensity had positive correlation to investment decisions, supporting previous studies on this two variables relationship.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Erly Mulyani
AU  - Halkadri Fitra
AU  - Fiola Finomia Honesty
PY  - 2021
DA  - 2021/11/23
TI  - Investment Decisions: The Effect of Risk Perceptions and Risk Propensity for Beginner Investors in West Sumatra
BT  - Proceedings of the Seventh Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA 2021)
PB  - Atlantis Press
SP  - 49
EP  - 55
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211117.034
DO  - 10.2991/aebmr.k.211117.034
ID  - Mulyani2021
ER  -