Behavioral predispositions of Indian women investors: An empirical analysis

Individual investors, irrespective of gender, generally exhibit behavioral patterns that impact their stock investment decisions and expected returns. This research focuses on women investors trading in India's stock market to measure the influence of select behavioral biases on their decision-making. It also explores the impact of their decisions on investment performance. Following the Survey Monkey tool, the survey used a structured questionnaire to elicit information from individual investors from almost all regions of India during the second wave of the COVID-19 pandemic. With the support of ten leading broking houses actively operating under the aegis of the National Stock Exchange of India, we collected 518 valid responses from individual investors, of which 242 (47%) were women. The participants' responses compiled who fulfilled the criteria of a minimum of one year of trading experience and at least one transaction in the year under study. We applied descriptive statistics and multivariate analysis to interpret the results. The main findings are that these investors exhibited varying cognitive and emotional biases. Confirmation bias, availability bias, regret aversion bias, and disposition bias significantly affected their decision-making. These biases have also contributed positively to achieving their desired returns and satisfaction. Surprisingly, cognitive biases such as overconfidence and herd biases have less impact on women investors. The study is relevant for financial advisors to understand the investment psychology of women and, accordingly, design a tailor-made portfolio for them. This study would also guide women investors to recognize the significant biases that impact their decisions that might stand in their way of getting expected returns from stock investments.