Abstract

Investing in the stock market has become a common practice in the modern world. Despite the fact that stock market investments provide substantial returns, they also entail substantial risk. The behavior and attitudes of an investor depend on the level of risk involved. Social and psychological factors have a significant influence on investor behavior. In this study, the theory of planned behavior serves as a conceptual framework for analysing the degree of influence each component has on people’s investment-related behavioural intentions. Each investor’s information is collected through a structured questionnaire. In addition to providing compelling evidence for the existence of psychological variables, the study supports the contention that four psychological variables - overconfidence, excessive optimism, risk psychology, and herd behavior - have a significant impact on people’s attitudes toward investing. In addition, the study found evidence to support the claim that social factors - Media, Social Interaction Internet – have a positive relationship with the attitude towards trading, and that there is a strong positive correlation between attitude and intention towards trading, whereas perceived behavioural control and subjective norms are moderately positively associated with intention towards trading. A moderately positive correlation exists between trading intent and trading behavior.