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Guided by several pioneered studies, the purpose of this paper is to comprehensively investigate the investment behaviours of Malaysian retail and institutional investors in an attempt to identify whether the influence of psychological biases is equally applicable to investor divides.

The researchers have adopted a quantitative research design by way of survey methodology to obtain data from institutional and retail investors in Malaysia. In addition, the authors have mainly employed second-order measurement invariance analysis to uncover the difference across investor divides.

The tests of measurement invariance at the model level indicate an insignificant difference between institutional investors and retail investors. The post hoc test (at the path level) reveals that institutional and retail investors are similar with respect to representative heuristic, overconfidence bias and anchoring bias; though the results also show that they are different with respect to religious bias and herding bias.

Based on the findings of this study, it is generally not logical to assume that institutional investors completely behave rational during investment decisions. Besides, future researchers are called upon to directly compare the investment decisions of institutional and retail investors with respect to whether the influence of psychological biases is equally applicable to them, particularly on the investigated psychological biases and other psychological biases that are not covered in this study.

This study has offered insight into whether the influence of psychological biases is equally applicable to institutional and retail investors in Malaysia using second-order measurement invariance analysis. This study is unique in context and the approach it has adopted.

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.

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.

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.

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.

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

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.

Despite a large stake of investment by retail investors and a growing number of peer-to-peer (P2P) lending platforms coupled with the initiation of secondary market and strong regulatory framework, less is known what leads investors to trust in P2P (TP2P) lending platforms in a multi-ethnic country, Malaysia. This study aims to investigate the effects of individual characteristics (gender, age, ethnicity, education and income), social influence of P2P (SIP2P) lending and privacy of P2P (PP2P) lending on the trust in emerging P2P platforms.

A cross-sectional survey was conducted to collect the data from retail investors in Malaysia. A variance-based partial least squares-structural equation modeling (PLS-SEM) model was applied to examine the significant predictors of TP2P lending platforms.

The results show that while investors' income is positively related to TP2P lending platforms, younger investors are less likely to have trust on P2P lending platforms. PP2P lending platforms increases retail investors' trust toward P2P platforms in Malaysia.

P2P service providers are suggested to give especial attention to investors' specific characteristics to develop trust and attract investors to the platforms. Service providers need to ensure the privacy of potential investors' personal and confidential data to build investors' trust.

This is the first study to assess retail investors' trust toward online P2P lending platforms in Malaysia, where this alternative financing platform gradually gaining popularity.

The main purpose of this study was to examine the investment decision behaviour of retail investors in Malaysia.

The study adopted semi-structured interviews to solicit an understanding of six retail investors on investment decision behaviour in Malaysia. Content analysis technique was used to analyse the data and verbatim texts were applied in discussing the emergent themes.

The findings indicate that retail investors in Malaysia are patriotic in nature, and their investment decisions are based on feeling of comfort or convention rather than quantitative analysis. They rely so much on their findings rather than third party’s views for making investment decisions. They were influenced by the psychological biases because they herd on the information. Challenges are solved through experience, and they believe that proper understanding of the financial and economic settings of the country can enhance better investment decision-making.

A more detailed investigation on the investors’ behaviour with more samples may expand our understanding of this issue. Future studies need to examine the investment decision behaviour with more samples.

First, it will prepare hit and run investors to be more ready to remain in the market and improve their skills on how to make sound investment decisions. Second, it helps the investors to know that knowledge of traditional finance theory is not sufficient to excel in stock market, and, hence, they need to know more about behavioural finance. Third, investors are exposed to various reasons as to why investment decisions deviate from expected and different means of solving the challenges faced in making investment decision within the Malaysian context. Fourth, investors are reminded that understanding the financial settings before investing is essential. Finally, policy makers in stock market are able to understand the retail investors’ behaviour.

This study examines the experience and prospect to remain as stock market investors, their priorities in selecting the right company for investment purposes, the kind of information seeking from third parties, the challenges faced by them and other important considerations in investment decisions. These have never been examined together in this way in investigation of retail investors’ investment behaviour.

The efficiency of unit trust (UT) funds from quite number of contexts across the globe has been highlighted in previous literature. Yet, there is dearth of research that empirically investigates the factors that influence the selection of UT funds by retailers, particularly in the Malaysian setting. This paper aims to narrow this research gap, whereby perception of past performance, perception of funds’ commitment to Shari’ah compliance, perception of funds’ size and perception of risk tolerance are hypothesized to exert statistically significant influences on the selection of UT funds by retail investors in Malaysia.

The empirical study uses a quantitative research approach whereby survey data have been sampled from 140 retail investors from around Malaysia, using simple random sampling technique. Data analysis has been carried out using multiple regression analysis employing SPSS version 20.0.

The empirical research finds that perceptions of fund size and Shari’ah compliance significantly influence the selection of UT among retail investors in Malaysia. However, there were no enough evidences to support the claims that perceptions of past performance and of risk tolerance influence the selection of UT among Malaysian retail investors.

This research is cross-sectional and uses data from Malaysia only.

The findings from this research will have enormous implications for policymakers in the accounting and finance sectors of government and private financial institutions and for individual professional Malaysian investors. In particular, investors in Malaysia and potential investors abroad may be enlightened by the findings of this research. Again, Islamic financial institutions may use the findings to boost their performance improvement interventions, thus, having clear evidence of the actual factors that influence retailers in the Malaysian setting.

To the best of the authors’ knowledge, this research is among the pioneering research works that empirically explores the factors that influence Malaysian retailers to invest in UT funds. This research is expected to stimulate further research in this novel area.

The purpose of this paper is to investigate who trade actively in the Malaysian stock market and what determines investors’ active trading decisions.

Using a cross-sectional survey on individual investors, the study identifies active and inactive investors and then, investigates active trading by estimating binary logistic regression.

Active investors in Malaysia are more likely to be male, working in non-finance-related sectors and are more experienced. The likelihood of active trading increases with the number of hours spent on researching investment, very short-term favorable unemployment and economic growth expectations (three-month) and past investment outcomes, whereas this probability decreases with higher cognitive ability and short-term unemployment expectations.

The results imply that regulators may focus on certain groups of investors, based on the result of this study, and provide them training to reduce inactivity in this market. As active trading in response to past investment outcomes indicate rational response, regulators therefore may inform investors to learn about their ability and skill from their prior investment outcome, through educational program. Educational program may also include the role of macroeconomic indicators in active investing decisions.

This is the first study to combine a list of demographic and socio-economic characteristics, investment characteristics, macroeconomic expectations and past investment outcomes together to explain the likelihood of active trading.

This study aims to investigate the influence of various risk factors, specifically investment risk, legal risk and technology risk, on the decision of investors to invest in equity crowdfunding ventures in Malaysia.

A total of 169 valid responses out of a total of 195 questionnaires were distributed to individuals with prior knowledge of equity crowdfunding. The data from the responses are used to test the relationships using structural equation modeling partial least squares (SEM-PLS).

Investigation into the influence of risk factors on the willingness to support equity crowdfunding shows that investment risk and legal risk significantly influence the decision to support equity crowdfunding ventures, but technology risk does not. However, while the influence of investment risk is negative, legal risk is found to have a positive influence.

This study is important as, to the authors’ knowledge, this is the first study to empirically test the relationship between the various risks inherent in equity crowdfunding investments and the decision to invest. The study is also important to entrepreneurs and start-ups as it provides evidence that while the equity crowdfunding investment community follows the norms of investment, i.e. lower risk is preferred, stricter laws and regulations governing equity crowdfunding may not be needed or may only be relevant in countries where there are more retail, unsophisticated investors.

The purpose of this paper is to test the competing explanations of stated preferences for firm characteristics, optimism and overconfidence for trading activities in a single framework.

A survey methodology is followed to collect the data among retail investors in Malaysia using simple random sampling.

The findings show simultaneous identification of stated preferences for firm characteristics, optimism and overconfidence as determinants of trading activities. Preferences for firm’s profitability characteristics, management and product-related attributes and risky characteristics are likely to decrease investors’ trading activities. On the other hand, preferences for firm’s liquidity and trading volume characteristics with relative financial-domain optimism, personal investment optimism and better-than-average aspect of overconfidence are likely to increase investors’ trading activities.

This finding implies that investors should be careful not only in assessing firm’s characteristics but also need to understand the effects of optimism and overconfidence in trading decisions.

The study considers various aspects of optimism and overconfidence, and the stated preferences for firm characteristics, unlike one aspect of these behavioral biases and indirect observation of preferences for firm characteristics. Furthermore, the study considers trading frequency, annual portfolio turnover and trading intention, whereas earlier studies considered only one or two of these trading decisions.

This study aims to analyze how risk tolerance is influenced by bull and bear market phases, age and professional work experience (PWE) of investors in emerging economies. The authors also analyze how different market phases (bull and bear) influence risk tolerance of investors in emerging economies for different age groups and with varying PWE.

The study uses two quantitative methods, one-way ANOVA and hierarchical regression model (HLM) to analyze individual investors' financial risk tolerance (FRT) in India.

The authors find that age and PWE have positive relationship with FRT behavior. However, interactions of these variables with market phase variable indicate that risk tolerance has nonlinear increasing relationship with investor's age and PWE. The risk tolerance of older investors is consistently high in both bull and bear market conditions, while young investors display a nonlinear risk behavior in different market conditions.

The study suggests that financial planners should include a longitudinal risk profiling of investors based on age groups, PWE and the current market phase to better understand investors' FRT and also to prefer more context-specific advice to investors in emerging economies, which, consequently, result in increasing the retail investors' interest in otherwise sparsely participated equity market.

Interaction effect of bull and bear market phases on relationship between age and PWE and FRT has been scantly studied.

Given the special feature of institutional investors in Malaysia, the purpose of this paper is to explore how these investors acquire and employ different information sources in their investing decisions.

The study uses self-reported information sources collected via a survey of 66 institutional investors following convenience sampling, and estimates the relationship via Smart-PLS (Partial Least Squares) path modeling.

The results suggest that although investors place greater importance on fundamental and technical indicators, they do not implement these information sources in their decisions. Rather, gathering information from economic statistics and ratios, discussion with colleagues, historical returns of the Malaysian stock market, decisions of other market players, specialized press and stock exchange bulletins, and statements of opinion leaders are more closely related to trading, risk taking, and financial asset holding. This finding supports the limited information processing of bounded rationality, irrespective of the type of information source.

Institutional investors should critically assess the information sources upon which they rely to collect information as irrational information processing may adversely affect the stock market efficiency.

To the authors’ knowledge, this is the first study to explore the unique features of institutional investors in Malaysia in conjunction with their sources of information, and to identify which sources matter when making investing decisions.