FACTORS IN INVESTMENT DECISION MAKING FROM DIRECTORS’ PERSPECTIVES

Abstract

An informed investment decision is by clarifying a better understanding of the financial risks and returns along with the financial analysis. Naturally, most of the investorsanticipate the investment portfolio that promises a high return. Through investment strategy, an individual should be equipped withbetter information about the investee company to protect themselves from the risk of wrong financial decisions. This paper aims to explore the factors in investment decision making in Malaysian Public Listed Companies (PLCs) based on the directors’ perspectives. Thereis dearthofstudies focusing on the perspective of directors of the company who act as agents to the individual shareholders in managing the management of the company. These are some of the aspects that are less
emphasized by previous studies. This paper applied a qualitative approach by interviewing four directors of Malaysian PLCs from trading services sector, industrial product sector and consumer product sector in the Klang Valley area,data was then managed through Nvivo software. The findings revealed that there are four contributing factors that influence individual shareholders’ investment decision making, these are; (i) type of company; (ii)the growth of the investee company; (iii) size of the company; and (iv) the sustainability of the company. Based on the directors’ perspective, it can be concluded that the four factors in investment decision making shall be regarded as the characteristics of the company.These findingsmeaningfully indicate the criteria of the company which can be helpful to investors and other stakeholders.It is noteworthy that, this study acknowledges that there is a number of additional
areas that requires further research, such as, exploring the perspectives of the directors from large group sectors in Malaysia.