Study of Investor Behavior on Stock Investment Decision Making with Self-Monitoring as a Moderating Variable in Generation Y and Generation Z

[Purpose] This study examines the influence of psychological biases (trait anger, trait anxiety, overconfidence, and herding) on stock investment decisions among Generation Y and Z investors in North Sumatra. It uniquely investigates the role of self-monitoring as a moderating variable to determine if high self-regulation can mitigate irrational investment behaviors. [Design/methodology/approach] This research employs a quantitative approach, utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze data from 384 retail investors. Additionally, an independent sample t-test is conducted to identify generational differences in decision-making patterns. [Findings] The results indicate that trait anger and anxiety negatively affect investment decisions, while herding and self-monitoring have a positive influence. Crucially, self-monitoring significantly moderates the relationship between trait anger and herding behavior on investment decisions. Generation Z is found to be more risk-tolerant and technology-driven, whereas Generation Y is more cautious and analytical. [Practical Implications] The findings suggest that financial literacy programs for young investors should go beyond technical analysis to include psychological conditioning. Regulators and investment managers can utilize these insights to design “cooling-off†mechanisms in trading apps or educational modules that enhance self-monitoring skills, thereby reducing impulsive trading. [Originality/Value] Unlike previous studies that solely focus on the direct effects of behavioral biases, this study bridges a theoretical gap by introducing self-monitoring as a psychological buffer. It provides a novel behavioral model for emerging markets, demonstrating how self-regulation can dampen the adverse effects of herding and emotional instability.