THE INFLUENCE OF FINANCIAL LITERACY, RISK TOLERANCE, AND EXPERIENCED REGRET ON INVESTMENT DECISIONS

Abstract

This research aims to investigate the influence of financial literacy, risk tolerance, and experienced regret on individuals' investment asset selection. Understanding these factors in an era of economic complexity is vital to guide informed investment decisions. This research focuses on Management students at Maranatha Christian University, as they represent an educated group likely to engage in investments. Employing a quantitative approach with a descriptive-explanatory method, the study gathers insights into how these variables interact to shape investment preferences. The sample comprises 110 respondents selected using purposive sampling, ensuring that participants meet specific criteria relevant to the research objectives. Data was collected using a structured questionnaire based on a six-point Likert scale to capture nuanced responses. The collected data were analyzed through multiple linear regression using IBM SPSS software to evaluate the relationship and significance of the variables.The findings reveal that financial literacy significantly influences investment decisions, indicating that individuals with a higher understanding of financial concepts tend to make better-informed investment choices. Similarly, risk tolerance plays a crucial role, as individuals' willingness to take risks determines their selection of investment assets. Experienced regret also has a measurable impact, highlighting the psychological aspect of previous investment outcomes on future decisions.This research contributes to the broader understanding of investment behavior, emphasizing the need for financial education and awareness of psychological factors in decision-making. These findings provide valuable insights for educators, policymakers, and financial advisors in designing strategies to enhance financial decision-making skills, particularly among young adults.