Business, Management and Accounting
3 years ago

Optimism boosts investment decisions, overconfidence has no impact in Indonesia.

Jurnal Akuntansi
THE IMPACT OF OVERCONFIDENCE AND OPTIMISM ON INVESTMENT DECISION ON INDIVIDUAL INVESTOR IN INDONESIA
Reni Pratiwi, Farah Margaretha Leon

Paper Summary

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The study looked at how overconfidence and optimism affect investment decisions by individual investors in Indonesia. They surveyed 200 investors and analyzed 151 responses using a likert scale. The results showed that overconfidence did not impact investment decisions, but optimism did have a positive influence. This means that investors may be more willing to take risks and choose high-return portfolios due to their optimism. It's important for investors to balance their optimism with considering the risks involved in each investment decision.