Behavioral Modeling of Retail Investment Decisions in Malaysia: Toward an Ethically Integrated Knowledge Framework

Abstract

This study aimed to model the investment decision-making behavior of retail investors in Malaysia, addressing the increasingly important role these investors play in the financial market. To gather relevant data, a comprehensive questionnaire was administered, resulting in a sample size of 255 respondents, ensuring a robust representation of retail investor perspectives. The analysis utilized descriptive analysis to outline the characteristics of the respondents, followed by correlation analysis to explore the relationships among various influencing factors, and multiple regression analysis to determine the extent of their impact on investment decision-making. The findings revealed that several key factors significantly influence the investment behaviors of retail investors. Specifically, capital gains, cash dividends, and recommendations from trusted advocates were found to have a strong positive influence on the decision-making process. This underscores the importance of financial returns and social validation in the investment choices made by these individuals. Conversely, the study also indicated that the firm image does not have a considerable impact on the behavior of retail investors, suggesting that investors may prioritize immediate financial incentives and personal recommendations over corporate reputation.This research contributes valuable insights into the preferences and motivations of retail investors in Malaysia, providing essential information for financial advisors, policymakers, and firms aiming to engage effectively with this segment of the market. Understanding these behavioral factors can enhance practices within the investment community and foster a more supportive environment for retail investors.