The Investor's Uncertainty Experience in Facing Financial Market Volatility: A Subjective Perspective on Investment Decision-Making Amid Global Economic
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Abstract
The field of behavioral finance explores the psychological influences on investors' decisions, particularly during periods of market volatility. Despite extensive research on financial theories and investment strategies, there remains limited understanding of how investors’ subjective experiences and emotional responses to market fluctuations shape their decision-making processes. This study aims to address this gap by examining the lived experiences of investors facing market uncertainty and exploring the psychological and emotional factors influencing their investment choices. Using a phenomenological approach, in-depth interviews were conducted with 10 experienced investors to capture the essence of their investment decisions during volatile market conditions. The findings reveal three key themes: (1) the pervasive influence of fear of loss, which often results in conservative decision-making such as liquidating assets or reallocating to perceived 'safer' investments; (2) the role of optimism, particularly among investors with a higher risk tolerance, which fosters resilience and long-term strategies despite market downturns; and (3) the dynamic interplay between cognitive biases, such as overconfidence or anchoring, and emotional responses, which shape real-time investment adjustments. These results contribute to the understanding of how investors' subjective experiences, rather than purely rational analysis, shape their behaviors and highlight the importance of considering psychological factors in investment theories. The implications of this study suggest that future research should further explore the psychological dynamics of investment behavior, particularly in the context of external economic events.
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