The Analysis of Investment Decisions of Foreign Exchange Investors from the Perspective of Behavioral Finance

Abstract

Behavioral finance is a multidisciplinary sub-branch of finance that seeks to explain the financial decisions of investors by taking advantage of different fields such as sociology, psychology and anthropology. The purpose of this research is to examine the behaviors of the individual foreign exchange investor from the perspective of behavioral finance. In the study, the behaviors of individual foreign exchange investors were studied under five dimensions: overconfidence, overoptimism, regret aversion, loss aversion, and representative bias. A total of 319 individual foreign exchange investors was surveyed in order to investigate the relationship in question. This study investigates the difference in the behaviors of individual foreign exchange investors in terms of marital status, age, education level, professional experience, frequency of reviewing the investments, the most frequently used sources of information while making decisions about the investments, the most common methods used for the preference of investment instruments, the main factors considered in the preference of the investment instruments, the amount of capital, and personality traits. The research findings are discussed in the conclusion section.