Determinants of investment satisfaction among young investors in Indonesia

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Indonesian stock market is dominated by young and relatively inexperienced traders who often depend on the recommendations of influencers or bloggers in social media. This will then make them dependent and conduct frequent trading, which also means higher transaction costs that diminish their profits and increase their risks, thus decreasing investor satisfaction. Therefore, this study aimed to examine the impact of perceived investor sophistication and social media influence on investment satisfaction mediated with perceived investment return as a mediating element. The analysis focused on young investors aged 18 to 30 who have invested in shares on the Indonesian Stock Exchange for at least one year. A quantitative method was adopted using questionnaires to collect data from 344 respondents. Furthermore, data were analyzed using Structural Equation Modeling – Partial Least Square (SEM-PLS) with SMART PLS 4.0 software. The results showed that both perceived investor sophistication and investment return significantly affected investment satisfaction with beta coefficients of 0.416 and 0.358, respectively. Perceived investor sophistication also significantly influenced perceived investment return with a beta coefficient of 0.557. Additionally, social media influence significantly affected perceived investment return with a beta coefficient of 0.103. This social media influence did not directly impact investment satisfaction but through the perceived investment return, which was further found to fully mediate the impact of social media influence on investment satisfaction. Perceived investment return also partially mediated the effect of investor sophistication on Investment Satisfaction.

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    • Figure 1. Research model
    • Figure 2. Path diagram
    • Table 1. Demographic profile
    • Table 2. Construct validity and reliability
    • Table 3. R-square
    • Table 4. Path coefficient and hypothesis test results
    • Data curation
      Fredella Colline
    • Project administration
      Fredella Colline
    • Visualization
      Fredella Colline
    • Writing – original draft
      Fredella Colline, Dezie Leonarda Warganegara
    • Writing – review & editing
      Fredella Colline, Toto Rusmanto, Yanthi R. I. Hutagaol
    • Formal Analysis
      Toto Rusmanto, Yanthi R. I. Hutagaol
    • Methodology
      Toto Rusmanto, Yanthi R. I. Hutagaol
    • Supervision
      Toto Rusmanto, Dezie Leonarda Warganegara
    • Conceptualization
      Dezie Leonarda Warganegara
    • Validation
      Dezie Leonarda Warganegara
    • Investigation
      Yanthi R. I. Hutagaol
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Investment Management and Financial Innovations