English Abstract
Abstract:
The ultimate aim of this study is to investigate the impact of behavioural biases on the stock
investment decision of individual investors at Bahrain Bourse by exploring the biases, specifically
overconfidence, loss aversion, herding, and risk perception, and identifying their effect on
investment decision making.
To conduct this study, a number of questionnaires were distributed to the participants using the
snowball sampling method. A sample of the questionnaire was randomly distributed to individual
investors in Bahrain Bourse, asking them to distribute the questionnaire to their partners or
relatives who are potential investors. Consequently, 168 responses were collected and analyzed
using the IBM SPSS statistics software and Microsoft excel. Descriptive statistical analysis
methods were also used on the collected data.
To test the hypotheses and determine the impact of each chosen variable on investment decision-
making; correlation analysis and regression analysis methods were used in this study.
As a result, a statistically significant positive correlation was found between all behavioural biases
of the study and the individual's investment decision making in Bahrain. Multiple regression
results showed that all independent variables were found to have a statistically significant positive
effect on investment decision making. This confirms the importance of behavioural biases' impact
on individual's investment decisions. Investors can be aware and in control of these biases when
they make their investment decision in the market.
Keywords: behavioural finance, investment decisions, individual investors, Bahrain Bourse.
