Investment decision behaviour of the Malaysian retail investors and fund managers

Purpose - This study aims to investigate the Malaysian retail investors and fund managers’ investment decision behaviours. The study offers an important opportunity for understanding the investors’ experiences, how they understand the Malaysian economy and their priorities for company selection. Other main aspects of this study are how investors mitigate the influence of emotions and psychological biases and challenges faced during investment decisions. Design/methodology/approach - The researchers have mainly adopted an interpretivist approach for the present study. Qualitative data elicited through semi-structured interviews conducted with four retail investors and four fund managers were subjected to qualitative thematic analysis. Findings - The results reveal that the investment decision processes of fund managers are more comprehensive than those of retail investors. Although both fund managers and retail investors acknowledge the influence of psychological biases on their investment decisions, the former use different and comprehensive approaches to mitigate such influences during investment decisions compared with the latter. Other important findings are how investors understand the Malaysian economy, their priorities for company selection and challenges faced during investment decisions. Research limitations/implications - The researchers have interviewed eight carefully selected interviewees across retail investors and fund managers divide. Adopting other grouping criteria, focus group discussion with more respondents or adopting a mixed-methods approach may increase our understanding of the investment decision behaviours of Malaysian retail investors and fund managers. Practical implications - This study could be used as a guide by both retail investors and fund managers when making investment decisions. Originality/value - This research has included both retail investors and fund managers; it has also increased literature on investment decision and behavioural finance, particularly in the context of Malaysian investors and managers.