DOI: 10.36347/sjebm.2023.v10i06.002

Pages: 136-143

Purpose: The long-term goal of this research is to find out the behavior of investors in making investment decisions in the capital market, while the specific target to be achieved is to know the biases of investor behavior in making investment decisions. Investment decision makers do not always behave in a way that is consistent with the assumptions made in accordance with the perception and understanding of the information received, but is strongly influenced by psychological factors. Research Methodology: This type of research is descriptive quantitative research. The survey was conducted on investors who are members of the group of young investors. The population of this study is all investors who actively trade in the Bali branch of the Indonesia Stock Exchange. By using a purposive sampling method, namely taking samples by adjusting the research criteria, namely investors who have made transactions in trading on the stock exchange for at least two years. Multiple regressions was used to test the hypotheses that were developed at a significance level of 0.05 percent. Results: Investors experience behavioral bias due to the influence of disposition and excessive trust. This circumstance will result in a reduction of their final wealth. The disposition effect influences decision making on investor behavior in the capital market. Investors have a tendency to realize less profits compared to the tendency to realize losses. Limitations: The results of this study may not apply to other excluded categories because this research is limited to investors who actively trade in the Bali branch of the Indonesia Stock Exchange. Contribution: Investors will be better off if they don't hold their shares for too long when the stock price declines and are not advised to sell profitable shares too quickly. Investor literacy should be improved by understanding information about company fundamentals.