Smart investing: Unveiling key drivers of strategic investment for investors in the Indonesia Stock Exchange

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To achieve the optimal investment decision, people should have better financial literacy. A better understanding of stock investment can be obtained through having experience investing in the stock market. Besides experience, influences from financial socialization agents such as family, friends, education, and media will improve financial knowledge. Hence, it will determine investments wisely. The aim of this study is to determine the degree to which financial experience, family, peers, formal education, media, and financial literacy have direct on impact investment decisions and furthermore to determine the role of financial literacy as mediating variable between financial experience, family, peers, formal education, media, and investment decisions. Investors who have already registered on the Indonesia Stock Exchange are the respondents to this study. Only those investors are allowed to invest in the Indonesian stock market. There are 716 respondents who were analyzed using self-administered questionnaires and structural equation modeling (SmartPLS). Findings show that peers and financial literacy have a direct positive impact (p<0.05) on investment decisions, while financial experience, family, education, and media do not (p>0.05). Additionally, financial experience, peers, education, and media have a significant positive effect on financial literacy (p<0.05), while family does not (p>0.05). Financial literacy is shown to mediate the relationship between financial experience, peers, education, media, and investment decisions (p<0.05) but not with family (p>0.05). This implies that having financial experience improves financial literacy, which leads to better investment decisions. Furthermore, peers, education, and media all play an important role in increasing financial literacy to make optimal investment decisions.

Acknowledgment
We want to express our sincere gratitude to Universitas Multimedia Nusantara for providing the grant to support this project. Without the generous support, the successful completion of this project would not have been possible. Additionally, we extend our appreciation to the editors and reviewers for their valuable input, which significantly contributed to enhancing the quality of this paper.

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    • Figure 1. Research framework
    • Table 1. Common method bias analysis
    • Table 2. Demographic profile of the respondents
    • Table 3. Convergent validity and construct reliability
    • Table 4. Discriminant validity – Hetero-Trait-Mono-Trait
    • Table 5. Results of the structural model assessment for direct and indirect effect
    • Table 6. Coefficient of determination and predictive relevance
    • Table A1. Questionnaire survey
    • Conceptualization
      Ika Yanuarti Loebiantoro, Eaw Hooi Cheng, Nursyamilah Annuar
    • Data curation
      Ika Yanuarti Loebiantoro
    • Formal Analysis
      Ika Yanuarti Loebiantoro, Eaw Hooi Cheng
    • Investigation
      Ika Yanuarti Loebiantoro
    • Methodology
      Ika Yanuarti Loebiantoro, Nursyamilah Annuar
    • Project administration
      Ika Yanuarti Loebiantoro
    • Validation
      Ika Yanuarti Loebiantoro, Eaw Hooi Cheng, Nursyamilah Annuar
    • Visualization
      Ika Yanuarti Loebiantoro
    • Writing – original draft
      Ika Yanuarti Loebiantoro
    • Supervision
      Eaw Hooi Cheng, Nursyamilah Annuar
    • Writing – review & editing
      Eaw Hooi Cheng, Nursyamilah Annuar
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Investment Management and Financial Innovations
Investment Management and Financial Innovations