How Individual Investors Select Stocks: A Case of Karachi Stock Exchange

Faisal Shamim Ahmed

MPRA Paper from University Library of Munich, Germany

Abstract: The research named as “How Individual Investors Select Stocks: A Case of Karachi Stock Exchange” will examine the individual investor’s views regarding making the decision while selecting the stock. This research will comparatively relate the influencing factors that are technical and fundamental analysis, financial statement information, valuation models, yield and profitability ratio analysis, and referral considered by the individual investors while making decision for the stocks that is to be bought or sell from the stock market. The main objective of this research is to find out the influence of the factors that are mostly concerned by the individual investors while stocks selection from the equity market. And to determine the result and analysis of the research the quantitative method has been used as it deals with the numeric facts and numbers and the data is being collected via survey i.e. questionnaire and deductive approach is applied as conclusion of the report is drawn stepwise i.e. starting from theory construction then building up hypothesis then further observation and finally leading to the conclusion. The result of the five independent and one dependent variables are drawn via the Pearson’s Correlation. The results of the Pearson correlation eventually determine that the all the results of the hypothesis on the bottom line is that the approach for the selecting the stocks varies between the individual investors. But, the most and dominating result in terms of percentage of the Pearson’s correlation test suggest that the financial statements information, yield and profitability ratio analysis and technical and fundamental analysis are mostly concerned and had the greater influence; while valuation models and referrals does not have that much influence on the individual investors while selecting the stocks from the Karachi Stock Exchange.

Keywords: Small Investors; Stock Exchange (search for similar items in EconPapers)
JEL-codes: G0 G1 (search for similar items in EconPapers)
Date: 2015-07-08
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