Factors Affecting Expected Return and Re-investment Intention of Stock Market Investors: A Comprehensive Study on Human Psychology during Investment Decisions

Abstract

The purpose of this study is to highlight the elements which are substantial in individual investment behaviour. The effect of all factors and their relationship on decision-making by investors explained in this study. For this purpose, the primary data collected through questionnaires from 276 respondents and convenience sampling used to collect data. Statistical tools such as Linear Regression Model and General Linear Regression Model were employed to analyze the data. The study reveals that return expectations decrease with the increase of investment experience of an individual investor. Furthermore, investment message has a significant relationship with risk perception, which shows that investors' risk perception increases using pessimistic information about the economy, and their return expectations decrease. Whilst, by using positivenews about the economy, the risk perception decreases and returns expectation increases. This research study was conducted only in Islamabad and Rawalpindi regions of Pakistan. Therefore, only the Islamabad Stock Exchange considered completing the survey.