Introduction

The qualitative and behavioral aspects of the investment have been a very hot issue from
the investment point of view from a long time period for research purposes. Researchers
have been trying to enhance the understanding of how people manage investments in
various ways. An extensive body of literature exists that stand to explain how different
factors influence the investor’s behavior. Common theme which makes a consensus that,
it is mainly the personal characteristics which influence the investment decision making.
Many studies have revealed that risk perception determines the long term investment
behavior. However, a general question comes in mind that to how much an extent an
individual personality aspect may influence the investment intentions.

The risk nature and the person’s behavior towards the risk is a very upcoming discussion
of the researchers. The Von Neumann and Morgenstern (1947) had discussed about te
risk in finance in his utility theory throuhg a model that only the expected utility is the
factor that effect the decision making in finance. Allais (1953) was opposed to that
theory. He said that to deal with the limited use of the maximization of expected utility in
decision making as only criteria, when risky elements are involved in making decisions.
Markowitz (1952) had discussed about when an investor faces the need for increasing
yields but not wanting the uncertain returns due to risks involved. Many other researchers
have also complete this discussion. The Efficient-Markets theory stipulate that stock price
changes due to new information. Due to that the investment decisions changes with
investor expectations based on new available information (Wärneryd, 2001). While there
is no clear true evidence of investor’s confidence (McConnell & Wahal 2000). It
integrates the relationship between investment intensions with reference to investor
confidence. Analysts’ think that corporate reputation has from time to time been taken
into account (Fombrun, 2000 & Mazzola, 2004), reputational perceptions of investors is
one area need attention respect to long term investment intensions. The model developed
by Sitkin & Weingart (1995) mentions risk perception and propensity are the
peacekeeping troops in risk behaviors of uncertain decision-making. Past investment
develops the frame for the propensity to risk perception which impact behavioral
decision-making. Thus risk orientation and risk perception are decreased to forebear
variables in decision-making behavior under risk and that it must be studies for long term
investment intensions. Researches based on the studies have inferred that investment
intensions are affected by so many behavioral aspects. (Mayfield, Perdue & Wooten,
2008).

Literature Review

Although an interesting collection of demographic characteristics have been used to

explain what drives the investment behavior of individuals, the discussion continues in
the literature concerning the mental past history that would accompany this human
behavior. A variety of studies have attempted to explore the psychological explanation
for investor behavior. For example Carducci and Wong (1998) find that persons having
Type A personality are more risk taking in all financial matters, though this may be
correlated to Type A persons nursing to have higher levels of income (Thoresen and
Low,1990) than Type B individuals. There is also evidence (Wong and Carducci, 1991)
of a desire for sense on the lookout for by some persons in terms of their financial
management.
But can investors charge risk with any correctness when making investments? Hallahan
et al (2004) believe that individuals can self-assess their risk easiness. Schooley and
Worden (1996) and Bailey and Kinerson (2005) wind up that there is a strong affiliation
between self-assessed risk and investment behavior. Wa¨rneryd (1996) says that there is a
relationship between the more specific investment risk attitude and the riskiness inborn in
investor portfolios. This research is established by Keller and Siegrist (2006), who find
that one’s financial risk attitude has a positive authority on willingness to accept
investment risk and invest in stocks in one’s portfolio. However, research by Morse
(1998) concludes that individuals have difficulty perceiving the actual risk connected
with the choice of investments they face, and so have complexity matching investments
to their preferred level of risk.

5 OBJECTIVE OF THE STUDY:

STUDY:

To find the effects of the following on long term investment decisions.

1- Personality type (Risk Aversion, Conscientiousness Openness
To Experience
2- Investor confidence
3- Risk perception
4- Information Asymmetry

6 RESEARCH METHODOLOGY

Instrument:
The instrument consisted of ___ items.

Sample selection:
Total 500 questionnaires will be distributed to all around the KPK and this will make the
research more comprehensive and diversified.
Procedure:
In terms of analysis part of our research, the statistical package for social sciences
program (SPSS) will be used to record, examine and analyze the data gathered. All the
items were analyzed individually and then compared with each other, and then
categorized and prioritized the factors asked in the questionnaire.

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