Analysis of Heuristic Behavior on Investment Decision
Fachrudin, Khaira Rizfia
Lubis, Arlina Nurbaity
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Stock investment decisions are the process of selecting a specific alternative from the evaluation of a number of alternative stocks that can provide the expected return. Stock investment decisions are influenced by investor behavior factor, there is a behavior bias one heuristic consisting of representativeness, availability bias, anchoring, gambler’s fallacy and overconfidence. This study examines the influence of heuristic behavior toward investment decision of investor in Medan city. The population of this research is investor in Medan city, research sample is taken from active online investor who joined in securities company located in Medan city. This study uses primary data by questionnaires with a sample of 120 respondents. Data analysis using descriptive statistical analysis and Structural Equation Model. The results showed that there is a significant influence representativeness and availability bias with alpha 5% toward investment decision. There is no effect of anchoring, gambler’s fallacy and overconfidence on investment decision The implication of this research is that managers of securities firms must know and understand exactly the behavior of investors before offering their investment products.