Abstract:
This study attempts to determine the main factors influencing investment decisions
of investors and how these factors are related to the investors’ demographic
characteristics in the Colombo stock Market. The study covers individual investors
using convenient sampling method to obtain information from 162 respondents
through a modified questionnaire developed by Al-Tamimi (2005). Independent
sample t-test and Analysis of variance (ANOVA) were employed. The results indicate
that the five most influencing factors on investment decisions of investors in Sri Lanka
are past performance of the company’s stock, expected corporate earnings, dividend
policy, get-rich-quick, marketability of the company. Also, the five least influencing
factors include religious reasons, rumors, loyalty to the company’s products;
government has a share in the company, and insiders’ information. The study finds
that the demographic characteristics of investors (age, gender, marital status, income
per month and educational qualifications) statistically and significantly influenced the
investment decisions of investors in Sri Lanka.
