Factors Affecting Short-Term Investment Intensions of Stock Investors in Pakistan

Investor’s behavior has been an important issue in the subject of behavioral finance. The process and determinants of short-term investment intension has been well documented. However, very limited research has been reported in this regard in Pakistan. The study is aimed to observe the impact of risk aversion and financial literacy on the short-term investment decision making of investors of secondary market. For this purpose, a 14 items questionnaire was established and distributed among 70 potential stock market investors through convenience sampling. Regression and correlation analyses were conducted to evaluate whether short term investment decision was affected by risk aversion and financial literacy. The results indicated that both these factors have a significant impact on the shortterm investment intensions/secondary market participation of the potential investors of Pakistan.