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Consciousness and investment efficacy: the mediating role of mindfulness

Author

Listed:
  • Rupali Misra

    (Amity University)

  • Sumita Srivastava

    (Dayalbagh Educational Institute (Deemed University))

  • D. K. Banwet

    (Indian Institute of Technology Delhi)

Abstract

The present paper investigates investor decision-making from a psychological standpoint and explores the role of consciousness and mindfulness on investors’ analytical ability and investment efficacy. A comprehensive survey instrument including sub-scales of different behavioural constructs is administered to 222 individual investors. We find evidence supporting the positive influence of cognitive capability on investment efficacy. The findings also suggest that mindfulness reliably mediates consciousness to cause an effect on cognitive capability. Higher cognitive capability will manifest in the form of detailed analysis and interpretation of available information and improve stock selection, asset allocation, and market timing, thus increasing investment efficacy. A mindful investor can mitigate negative stimuli, emotional turmoil, dilemmas and distress in stock trading in a far more superior way to mediate consciousness for higher cognitive capability. The implications of the study indicate that consciousness and mindfulness-based interventions may facilitate making the investors stronger to manage difficult times and perform a careful rational assessment to eventually become successful investors.

Suggested Citation

  • Rupali Misra & Sumita Srivastava & D. K. Banwet, 2023. "Consciousness and investment efficacy: the mediating role of mindfulness," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 22(1), pages 87-101, November.
    • Handle: RePEc:spr:minsoc:v:22:y:2023:i:1:d:10.1007_s11299-023-00296-0
    DOI: 10.1007/s11299-023-00296-0
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    References listed on IDEAS

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    1. Malcolm Baker & Jeffrey Wurgler, 2007. "Investor Sentiment in the Stock Market," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 129-152, Spring.
    2. Dolly Chugh & Max Bazerman, 2007. "Bounded awareness: what you fail to see can hurt you," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 6(1), pages 1-18, June.
    3. Misra, Rupali & Srivastava, Sumita & Banwet, D.K., 2019. "Do religious and conscious investors make better economic decisions? Evidence from India," Journal of Behavioral and Experimental Finance, Elsevier, vol. 22(C), pages 64-74.
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