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Investment decision behaviour of the Malaysian retail investors and fund managers: A qualitative inquiry

Haruna Babatunde Jaiyeoba (Department of Business Administration, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Gombak, Malaysia)
Abideen Adeyemi Adewale (Institute of Islamic Banking and Finance, International Islamic University Malaysia, Gombak, Malaysia)
Razali Haron (IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia, Gombak, Malaysia)
Che Muhamad Hafiz Che Ismail (Institute of Islamic Banking and Finance, International Islamic University Malaysia, Gombak, Malaysia)

Qualitative Research in Financial Markets

ISSN: 1755-4179

Article publication date: 8 May 2018

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Abstract

Purpose

This study aims to investigate the Malaysian retail investors and fund managers’ investment decision behaviours. The study offers an important opportunity for understanding the investors’ experiences, how they understand the Malaysian economy and their priorities for company selection. Other main aspects of this study are how investors mitigate the influence of emotions and psychological biases and challenges faced during investment decisions.

Design/methodology/approach

The researchers have mainly adopted an interpretivist approach for the present study. Qualitative data elicited through semi-structured interviews conducted with four retail investors and four fund managers were subjected to qualitative thematic analysis.

Findings

The results reveal that the investment decision processes of fund managers are more comprehensive than those of retail investors. Although both fund managers and retail investors acknowledge the influence of psychological biases on their investment decisions, the former use different and comprehensive approaches to mitigate such influences during investment decisions compared with the latter. Other important findings are how investors understand the Malaysian economy, their priorities for company selection and challenges faced during investment decisions.

Research limitations/implications

The researchers have interviewed eight carefully selected interviewees across retail investors and fund managers divide. Adopting other grouping criteria, focus group discussion with more respondents or adopting a mixed-methods approach may increase our understanding of the investment decision behaviours of Malaysian retail investors and fund managers.

Practical implications

This study could be used as a guide by both retail investors and fund managers when making investment decisions.

Originality/value

This research has included both retail investors and fund managers; it has also increased literature on investment decision and behavioural finance, particularly in the context of Malaysian investors and managers.

Keywords

Citation

Jaiyeoba, H.B., Adewale, A.A., Haron, R. and Che Ismail, C.M.H. (2018), "Investment decision behaviour of the Malaysian retail investors and fund managers: A qualitative inquiry", Qualitative Research in Financial Markets, Vol. 10 No. 2, pp. 134-151. https://doi.org/10.1108/QRFM-07-2017-0062

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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