Abstract:
The investor decision making plays an important role in the investor’s return. However, the factors
influencing investment decision making of individuals can differ from person to person because of
their personal, psychological, economical, social and environmental factors. Therefore, the main
objective of this study is to determine the factors influencing effectiveness of individual investor’s
decision making in Sri Lankan stock market. 150 individual investors who are involving in stock
market activities from Jaffna district have been selected for this survey. Self- administered and
structured questionnaires were used to collect the relevant data from investors. The questionnaire
constituted 34 items which are consisted in three parts like demographic information, factors
influencing effectiveness of individual investor decision making and questions related with the
effectiveness of investor’s decision making. Accounting information, neutral information, self -
image/firm image, advocate recommendation and personal financial needs have been considered as
explanatory variables and effectiveness of individual investor decision making has been considered
as outcome variable. Descriptive, correlation and regression analysis have been used to analyse
the data with aid of SPSS (version 20.0). Cronbach’s Alpha was used measure the reliability of
the collected data. As per the results of the regression analysis, accounting information, neutral
information and self-image/firm image have significant influence on effectiveness of individual
investor’s decision making while advocate recommendation and personal financial needs have not
significantly influenced on effectiveness of individual investor’s decision making in stock market.
Outcome of the survey may be considered by current and future investors to make their effective
investment decision.
