ASSESSMENT OF INDIVIDUAL AND INSTITUTIONAL INVESTOR’S INVESTMENT BEHAVIOR DURING COVID-19. A CASE OF EMERGING ECONOMY

Abstract

In the study of stock investment in capital market by investors in Pandemic Covid-19, it is always carried out rationally. Indeed, the decisions on stock investments are not always rational.The main purpose of this research is to analyze the behavioral factors that affect the preferences of individual’s investors and fund managers in the emerging stock market, Pakistan Stock Exchange. The data of this research were collected through interviews semi structured with the five investor and five fund managers from the stock exchange from Pakistan. The researchers used thematic analysis for data interpretation. The major findings stress that retail investors are more effected by behavioral biases in comparison with fund managers. Further, the results shows that there are some major biases which are effecting both type of investors such as: Herding, Market, Prospect, Overconfidence- gambling errors and Anchoring-ability bias. This study fills a gap in literature on investor psychological response during pandemic epidemic. According to the report, policymakers should devise a strategy to combat COVID-19. To avoid future catastrophes, government should control the health-care budget.