Behavioral Factors Affecting Investment Decision-Making. The Case of Ho Chi Minh Stock Exchange (HOSE), Vietnam

Behavioral finance encompasses human behaviors in finance and has not been studied extensively in Vietnam. Behavioral finance theories, which are based on human psychology, attempt to understand how emotions and cognitive errors influence individual investors' behaviors (investors mentioned in this study are referred to as individual investors). The main objective of this study is to explore the behavioral factors influencing individual investors' decisions which were measured by their return achieved. The study proposed to research six behavioral factors including representativeness, mental accounting bias, gambler's fallacy, availability bias, herd behavior and over-under reaction. The results showed that representativeness, gambler's fallacy and over-under reaction influenced their investment decisions. Representativeness and over-under reaction had positive impacts, gambler's fallacy had negative impacts and representativeness positively influenced the investment decision at the highest level