Behavioural Attributes and Performance of Securities Held By Individual Investor in Isiolo County, Kenya
DOI:
https://doi.org/10.47941/ijf.1577Keywords:
Behavioural attributes, Heuristic Variables, Herding Variables, Market Variables, Prospect Variables, Individual investor, Performance.Abstract
Purpose: This study, conducted in Isiolo County, Kenya, investigates the relationship between behavioral attributes and the performance of securities held by individual investors within the framework of behavioral finance. The research, focusing on attributes like risk tolerance, overconfidence, and loss aversion, employs a mixed-methods approach combining quantitative analysis and qualitative insights.
Methodology: Data on individual investors' behavioral attributes were gathered through surveys and interviews, while the performance of securities was assessed using metrics such as returns, risk-adjusted performance, and portfolio volatility. Utilizing statistical techniques and Bartlett’s test of Sphericity.
Findings: The study establishes that most behavioral attributes exert moderate impacts on security performance, with market factors displaying a pronounced influence. The significant relationship between market, prospect, and heuristic variables and the performance of securities is identified, with only one null hypothesis related to herding variables being rejected.
Unique Contributor to Theory, Policy and Practice: This research contributes uniquely to behavioral finance by providing insights into the nuanced impact of behavioral attributes on investment performance, particularly in the distinctive context of Isiolo County, Kenya. By shedding light on the interplay between cognitive biases, emotional responses, and financial performance, the study offers valuable insights for investors and financial professionals alike. The implications of these findings are discussed, and recommendations are presented to enhance individual investors' financial decision-making, both in the region and beyond, potentially informing policy measures to improve the investment climate for individual investors in Isiolo County, Kenya.
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