Psychological Factors Affecting Investment Decisions in Working Women

Abstract

This study is an inquiry into the psychological factors that influence investment decisions with working women, among whom more and more appear to be attaining economic independence and control over individual finances. Although this is so, various emotional and cognitive aspects continue to mold working women's perceptions and approaches toward investment opportunities.

Extant literature highlighted that women were more risk-averse, emotionally cautious, and socially influenced in comparison with men. The most important psychological factors found for women include less financial confidence, fear of loss, regret aversion, and being prone to social influence.

The data was collected from working women using a structured questionnaire. Data analysis was carried out using SPSS and Smart PLS. Results implied that psychological factors including tolerance for risk, emotional stability, level of financial confidence, and peer pressure had a strong bearing on the investment decisions of working women. There were greater inclinations toward safe investment options such as fixed deposits, insurance, and gold on the part of the respondents, chiefly to avoid financial losses and look after family interests. Women were influenced by suggestions from peers.

The research concludes that psychological considerations are equally crucial as financial awareness in influencing the behavior of investment. It suggests context-specific financial education programs that counteract emotional biases, instill financial confidence, and foster autonomous decision-making among working women. Identifying and addressing these psychological drivers have the potential to result in empowered, rational, and effective investment habits in this emerging constituency.