Investment Decisions of the Individual Investors in the Capital Market of Bangladesh

Abstract

Investment decisions of the individual investors in the capital market are influenced by various factors. Main objective of this study is to find out the influences of the factors on investment decisions of individual investors in the capital market in Bangladesh. A highly structured questionnaire has been used to collect primary data from 384 individual investors who are traded in the Dhaka Stock Exchange (DSE). The study respondents have been selected at a simple random method. Analysis of variance (ANOVA), multiple regression model, graphs, charts and tabular analysis have been used to analyze collected data and to test hypotheses of the study. The results showed that EPS has positive influence (β=0.0682, t=1.2439 and p=0.2143, test of hypothesis 2) on investment decisions and rank of EPS is 4 with mean score of 3.8099 and S.D=0.5087 (table 3). It has also found that dividend has positive relationship (β=0.0590, t=1.1054 and p=0.2697, test of hypothesis 3) with investment decisions and dividend is ranked 6 with mean score of 3.5755 and S.D=0.5593 (table 3). Accordingly, P/E ratio has a negative influence (β =-0.0069, t=-0.1341 and p=0.8934) on investment decisions of the individual investors. Therefore, this study will be very helpful to the individual investors to make correct investment decisions by analysing EPS, dividend trends and P/E ratio of the company.