Financial Literacy and Factors Affecting Investment Behavior

Abstract

The purpose of the study that in this high inflation investors want to get more return on different mode of investment while financial literacy is more important on investment when asset allocation and investigate an effect of risk perception, loss aversion & over confidence on the decisions regarding investment and identifies the moderation role of financial literacy on the dependent variable. Data was collected from 205 investors from all over the Pakistan the partial least square technique is used to test the relationship using the 205 investors. We applied the bootstrapping method to estimate the coefficient path of the relationships. It is important for the Investors in Pakistan to see the Economic Situation you need to portfolio of investing whether is commodities or stocks or property they get for good return. Financial Literacy is important role for the investors. This research provides insights in the sense that the financial literacy appeared to have the significantly affecting the decision making regarding the investment. Overall evidence indicates that investors are hesitant to make higher-risk investments. It also explains how a lack of financial literacy affects the capital market participation. It has also been found that the male is riskier rather than female.