The stock market in Pakistan is highly volatile and sensitive for unexpected shocks. In this market, the role and
importance of individual investors and their trading behavior is also very critical. But there is always an
environment of uncertainty and lack of information. Furthermore, the investment policies are formulated
keeping in view the interests of institutional investors only. So, it becomes impossible for the individual
investors to take decisions depending upon their own personal resources and complex statistical data.
Therefore, the individual investors resort to other non-statistical gadgets and try to make rational decisions
relying on non-statistical gadgets that are related to their behavior and psychology.
In this study, the researcher has investigated the importance of these non-numeric factors for individual
investors' investment decision making. The purpose of this study is to examine these determinants of
individual investor's behavior as well as the influence of these determinants on the individual investor's
decision. This is a quantitative research based on analytical and descriptive lines. Regression Analysis is used
to determine the relative importance of each behavioral factor.
This study bears great significance in recognizing the importance of heuristic and behavioral tools for
investment decision making. This research is a contribution in the research paradigm from the view point of
the policy makers also. It will play a significant role at the time of formulation of policies for institutional
investors and regulatory bodies such as Securities and Exchange Commission of Pakistan and at the same time
retaining the interests of individual investors.