Determining Factors for Young Investors to Invest in the Capital Market

Authors

DOI:

https://doi.org/10.26668/businessreview/2023.v8i5.1964

Keywords:

Financial literacy, Motivation, Personal Interest, Environment, Investment Behavior, Investment Decision

Abstract

Purpose: To find out the determinants of young investors in investing in the Capital Market.

 

Theoretical framework: Financial Literacy, Motivation, Personal Interests, Environment, and Investment Behavior. This topic was adopted from several theoretical studies and previous research which was put together as a single factor that influences the decisions of young investors in investing in the capital market.

 

Design/methodology/approach: This study used a quantitative approach with an explanatory design using a survey method. The sample in this study is young investors aged 18-25 years who invest in stocks on the Stock Exchange with a total sample of 110 samples. This study uses a 5-point Likert scale to collect research data.

 

Findings: The results show that 1) The independent variables of financial literacy, motivation, personal interest, environment and investment behavior simultaneously have a positive and significant effect on investment decisions with a large influence of 98%, while the remaining 2% are other factors not included in this model ; 2) The variables of financial literacy, motivation, personal interest, environment and investment behavior have a positive and significant partial effect on investment decisions; 3) the motivational variable is the dominant determining factor while the minimum is financial literacy.

 

Research, Practical & Social implications: We recommend a future research agenda related to investment diversification and investor retention as a result of investment decisions to become a unified role model.

 

Originality/value: Most of the previous studies have only partially used variables and none have broken down investors by age. However, a thorough and complete analysis of these factors along with the specifications of investors, especially young investors, is the target of the importance of our research.

 

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Published

2023-05-18

How to Cite

Awaluddin, M., Molina, Nurlia, & Wahyuni. (2023). Determining Factors for Young Investors to Invest in the Capital Market. International Journal of Professional Business Review, 8(5), e01964. https://doi.org/10.26668/businessreview/2023.v8i5.1964