Determinants of Investment Decision-Making During The Covid-19 Pandemic

The rapid and overwhelming impact of the coronavirus pandemic and containment measures have triggered a severe world economic crisis. Malaysia is not completely devoid of this pandemic, especially as one of the countries that relies greatly on international trade, tourism, exports of raw materials, and external funding. A severe collapse like this has made practically the entire population reluctant to invest, not to mention that many investments have been subdued. The Prospect Theory, Behavioral Finance, and Rational Expectation theories are referred to as underlying theories of this study. In light of such occurrence, this study aimed to investigate the factors (anxiety of market volatility, risk perception, vaccination status, and herding behaviour) that influence the decision making of investors regarding their investments during the COVID-19 pandemic. Structured questionnaires were distributed among investors in Klang Valley through social media and investors WhatsApp group. This study managed to collect 117 responses after three weeks of questionnaire distribution and Partial Least Square Structural Equation Modeling (PLS SEM) version 4 was utilised to analyse the data. The result of the research show that anxiety and herding have significant influence on investors’ decision making to invest during COVID-19. On the other hand, both risk perception and vaccination status are insignificant influence on the decision-making of investment amidst the pandemic. This research study is limited to individual investors as it does not include institutional and professional investors. A number of recommendations are made based on the study to help the general public understand the advantages and disadvantages of investing during a recession, such as providing more information on investment during pandemic by expertise to the individual investors, and the partnership of company stakeholders with health government in giving assurance that the vaccination helps the economy and investment portfolio of their companies.