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Friendship and Finance: Understanding the Social Dimensions of Individual Investor Choices

Author

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  • Qamar Shabbir Rana

    (University of Punjab Lahore)

Abstract

This study investigates the intricate relationship between social networks, specifically friendships, and the decision-making processes of individual investors in financial markets. It examines the substantial yet often underestimated influence of social connections on investment behavior, risk management, and financial decision outcomes. Through a comprehensive analysis combining quantitative data and qualitative assessments, this research aims to uncover the nuanced ways in which social interactions shape individual investor choices. In order to collect data, a survey was administered to engage in stock market investment. The current study employed regression, correlation, and descriptive statistics as the analytical methods. The findings imply that cognitive predispositions can exert an influence on the evaluations made by individual investors in their investment decisions. This study substantiates the theoretical premise regarding the integration of social interactions in the investment decision-making process. The results illustrate that investors are augmenting their self-regulatory and analytical capacities when making investment decisions, alongside an elevated recognition of the emotional ramifications linked to their choices. The findings not only contribute to a deeper understanding of the social dimensions impacting financial decision-making but also offer implications for improving individual financial decision processes and enhancing overall market understanding

Suggested Citation

  • Qamar Shabbir Rana, 2022. "Friendship and Finance: Understanding the Social Dimensions of Individual Investor Choices," Magna Carta: Contemporary Social Science, 50sea, vol. 1(3), pages 148-155, September.
    • Handle: RePEc:abq:mccss1:v:1:y:2022:i:3:p:148-155
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    File URL: https://journal.50sea.com/index.php/MC/article/view/626/1170
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    References listed on IDEAS

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