Identification and Ranking of Factors Affecting the Decisions of the Individual Investors in Tehran Stock Exchange

The purpose of this research is to assist the decision making of individual investors in Tehran Stock Exchange by identifying and ranking the factors affecting the individual investors' decision making. Given the various variables associated with investors decision making, first of all, the importance of 24 variables extracted from the research literature in terms of the severity of impact on individual investors' trading decision was surveyed by 95 broker managers of Tehran Stock Exchange. By applying an exploratory factor analytical method, the 8 variables of volume of stock trades, the behavior of Institutional investors, stock price volatility, stock return trend, earnings per share, the beta of stocks, dividend per share and realization of earnings per share were identified as the main factors influencing the investors 'decisions and then empirically tested the effect of these factors on the individual investors' decision using market trading data. For this purpose, 2268 stock trades were randomly selected from March 2018 until February 2020 and analyzed using logistic regression method. Based on the results of this test, variables of stock trading volume and behavior of institutional investors have significant positive effect on individual investors' purchase decisions and earnings per share predicted, stock beta and dividend per share have significant negative effect on individual investors' purchase decisions. Also, the effect of stock price volatility, stock return trend and earnings per share on individual investors' purchase decisions was not confirmed.