Impact of Financial Acumen and Stability Management on Investment Decision Making: A Special Reference to the IT/ITES Industry in Sri Lanka

Abstract

This research delves into the determinants influencing the decision-making processes of individual investors as they seek sustainable returns on investments. Adopting a positivist philosophical stance and employing a deductive approach, the study focuses on a sample of 15,000 professionals from the IT/ITES industry in Sri Lanka, selected through a stratified simple random sampling method. The study successfully achieves its objectives by employing a structured questionnaire, with responses analyzed primarily for validity, reliability, correlation, and regression using SPSS v27. Initially, validity and reliability are assessed using KMO, Bartlett’s, and Cronbach’s alpha, confirming the validity and reliability of the responses. Subsequently, correlation and regression analyses demonstrate the positive and moderate to strong relationships between investment risk exposure, economic stability, and financial knowledge on investment decision-making, consistent with the literature review findings. The study’s research findings provide valuable insights for investors to recognize potential biases in their investment decision-making processes, facilitating the ability to make well-informed and sound investment decisions.