Do heuristics affect Brazilian investors’ decision-making process?

Abstract

Purpose

The purpose of this research is to analyze the influence of heuristics on Brazilian investors' behavior in the decision-making process.

Design/methodology/approach

The authors apply the partial least squares structural equation modeling methodology. This sample is composed of 220 investors.

Findings

The heuristics of overconfidence and anchoring positively influence investors' decision-making, while loss aversion negatively influences it. The herd effect exhibits no influence. The results also support the idea that decision-making positively influences investors' performance. Investors feel secure in their attitudes regarding financial decision-making, even if their decisions are not always rational as they are affected by biases.

Originality/value

This article explains the influence of heuristics on investors' decision-making and performance in the Brazilian context during the COVID-19 pandemic.

Citation

Souza, V.V., Souza, L.L.F., Oliveira, O., Souza, E.M.d. and Costa, J.S. (2024), "Do heuristics affect Brazilian investors’ decision-making process?", Review of Behavioral Finance, Vol. 16 No. 2, pp. 282-299. https://doi.org/10.1108/RBF-09-2022-0210