The Factors Influencing Investment Decisions Among Investors in Purwokerto City

Abstract

Investment in the capital market has emerged as a key option for individuals to manage their finance and grow their assets. In Indonesia, individual participation in capital market investments has seen significant growth in recent years, driven by factors such as increased financial literacy, technological advancements that facilitates access to market information and transactions, and initiatives by the government and financial institutions to promote public involvement. The city of Purwokerto, located in Central Java, has experienced similar trend, with a rising number of individual investors and diversification in investment instruments. However, making investment decisions is complex and influenced by various interrelated factors, including psychological, demographics, social, and economic aspects. Prior research indicates that investors behavior is often not fully rational and can be subject to various psychological biases. Demographics Factors such as age, gender, education level, and income also play a critical role in shaping investment decisions. This study aiming to analyze the factors influence individual investment decisions in the capital market, focusing on a case study of investors in the city of Purwokerto. The research adopts a qualitative approach, employing in-depth interviews and thematic analysis to explore the psychological, demographic, social, and economic factors that affect investment decisions. Additionally, the study investigate the role of financial literacy in moderating these influences. The findings of this research are expected to contribute to the academic literature in financial management and offer practical insights for individual investors, financial institutions, and policymakers. These insights aim to enhance investment participation and performance in the capital market, particularly in the context of Purwokerto, Thereby supporting local economic growth and improving community well- being.

Keywords: capital market; investment decisions; psychological factors; demographic factors; financial literacy; Purwokerto.