Exploring the Factors Influencing Individual Investor Behavior (A Conceptual Framework)
Author:
Kamilah Saeed Almousa
PhD Candidate, King Saud University, Kingdom of Saudi Arabia
doi.org/10.52132/Ajrsp.e.2025.80.2
This study presents a comprehensive review of the literature examining the diverse factors that shape individual investor behavior. The analysis is organized around five major dimensions demographic characteristics, psychological biases, experiential influences, informational aspects, and governance mechanisms. Drawing upon both traditional and behavioral finance theories, the paper explores how investors’ decisions are driven not only by rational evaluation but also by cognitive limitations, emotional responses, and contextual environments. It highlights the complexity and heterogeneity of investor behavior, illustrating how deviations from classical rational models arise due to common biases such as overconfidence, loss aversion, and herding tendencies. By synthesizing insights across disciplines, the study develops a conceptual framework that integrates demographic and psychological attributes with institutional and informational dynamics. This framework enhances the understanding of how personal traits, learning experiences, and corporate governance structures interact to influence financial decision-making. The findings carry significant implications for policymakers, educators, and market regulators aiming to strengthen investor confidence, promote financial literacy, and ensure transparent reporting practices. In a rapidly evolving financial landscape characterized by digital trading and global connectivity, this review underscores the importance of understanding behavioral patterns to design policies and educational programs that foster rational, informed, and sustainable investment behavior.
Keywords:
Individual investor, Investor behavior, Behavioral finance, Corporate governance
Academic Journal of Research and Scientific Publishing
