INFLUENCE OF FAMILY MEMBERS ON INDIVIDUAL INVESTMENT DECISIONS
Abstract
Investing is a crucial aspect of achieving personal goals, increasing income, and reducing future risks. While blood is essential for survival, investments are necessary to meet future needs and mitigate risks that cannot be predicted. In India, family members have a significant influence on investment decisions, particularly those with working parents, spouses, children, and grandparents. Each family member has their own behaviour that affects investment decision-making. Therefore, this study focuses on behavioural finance attributes such as representativeness, anchoring, loss aversion, risk aversion, herding, and overconfidence to evaluate the extent of their impact on investment decisions. Additionally, the study examines the influence of investment-related information search on decision-making. The researcher employed a quantitative research design to collect data from 100 families and their members. The study found that the spouse had the most significant influence on investment decision-making compared to other family members. Behavioural finance attributes had a substantial effect on investment decision-making, as per the spouse's perception. The study revealed that children over 18 years had no influence on investment decisions. However, working parents' behavioural attributes of risk aversion and herding significantly affected investment decision-making, and grandparents' representativeness, anchoring, and risk aversion also had a significant impact on decision-making. Spouse's representativeness and herding behavioural attributes significantly influenced investment decision-making. In conclusion, the spouse had the most impact on investment decision-making among all family members, and behavioural finance attributes were significant factors affecting investment decisions.
Keyword : Behavioral Finance, Components, Decision Making, Family, Influence, Insight and Investment
This work is licensed under a Creative Commons Attribution 4.0 International License.
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