Impact of Psychological Variables on Investment Decision: Empirical Evidence from Bangladeshi Investors

Investors" (in fact, human) psychology is mysterious to comprehend. The ultimate aspiration of this study was to find out how psychological variables manipulate investors" rational investment decisions into irrational decisions. Traditional finance by and large ignores psychological aspects of investors" investment decisions though it has an enormous impact on investment decisions. In this study researcher tried to demonstrate how investors" psychological variables play imperative role on investment decision. To conduct this research, 200 investors (From DSE and CSE) were considered as sample to collect primary data through a structured questionnaire consisting 30 questions on dependent and independent variables to analysis and interpret their psychological aspects on investment decision. Mainly, regression analysis was adopted to analyze and interpret data using statistical tool like „Statistical Package for the Social Sciences" (SPSS). From the results of the analysis, researcher found that psychological variables play immense role to be irrational behavior on investment decision of the investors in Bangladesh. This paper also suggested some courses of action to the investors, policymakers and researchers to consider in the future.