Managing

Funds of
Insurance
Companies
Submitted By-Neshya Mary John(21IN626)

Palak Daryani(21IN628)

Tanya Sharma(21IN652)

Vivek Kumar Singh(21IN655)

VIIII
 Factors Affecting Millennials' Perspective on Investment
Decision Behavior during the Pandemic

Introduction

Millennials (generation Y) deal financially with greater ambiguity and conflict

when interacting with various patterns of informed activity or behavior than
older generations do. Further analysis of the findings reveals that the Covid-
19 pandemic had a much more profound impact on investor behavior,
financial investments, and economic growth. Players in the market thus grew
uneasy and apprehensive. Additionally, the price fluctuation, market
knowledge, historical trend, consumer choice, and underlying stock
fundamentals are market behavior elements that have been shown to
influence individual investors' decision-making. Numerous changes and
unanticipated actions take place over the most of the pandemic, affecting
everything from studying to working to market movements to investing.
According to several sources, the proportion of millennial investors who
participate in financial products, particularly shares on the financial market,
has increased significantly over the past several years.

1. Demographic factors
Demographic variables mostly influence individual decision-making behaviour.
People with low incomes and individuals with smaller monthly expenses appear
more willing to take financial risks than those with greater monthly salaries.
Female investors were hesitant to join for various reasons, including insufficient
knowledge of various investment instruments and pertinent instrument plans;
stock swings; unpredictability regarding invested cash and portfolio analysis;
redressing fears; etc. In general, guys are braver and more risk-taking than
women, so Men are more likely to invest in stocks than women. The greater a
person's education, the greater their understanding of the benefits, risks, and
classification of investments that can result in those benefits.

2. Market factors
When investing in any asset, the investor analyses the following factors: price
change, price-related news, seasonal price cycles, past trends, popular stocks,
and fundamental qualities of underlying companies. Knowledge of effective
market strategy has a significant impact on the decisions made by
shareholders, causing them to gravitate toward popular and successful stocks
and other advantageous activities. Many investors engage in substantial
trading due to overconfidence.

1|Page
3. Prospect factors
During Covid-19, millennials were exposed to investing uncertainty and risk,
which has influenced their investment decisions. Under epidemic and uncertain
conditions, Millennials are logical, loss-averse, and seek to maximise their
assets and investments. Loss aversion is a personality trait whereby investors
are so fearful of losses and risks in investing that they constantly focus on
avoiding a loss.

4. Heuristic factors
Overconfidence is viewed as a skewed perspective on a situation. This occurs
when an individual's subjective confidence in their abilities exceeds their actual
performance. It is believed that overconfidence increases perseverance,
mental capacity, dedication, and risk appetite; more specifically, it contributes
to the improvement of professional dependability and profitability, as well as the
enhancement of others' perspectives and abilities, in order to achieve rapid
advancements and long-term investment periods. Uncertain situations Covid-
19 promotes millennials' overconfidence. It may be the cause of increased
trade. They frequently regret their past assessments and judgments since they
were inferior to those of others.

5. Herding factors
Herding enables individuals to disregard their own particular details and accept
blindly because they believe that others have superior understanding.
Researchers discover that herd behaviour has a positive effect on the thinking
of individual investors. Individual investors may assume the portfolio is
profitable if their behaviour is influenced by male attitudes, according to their
argument. Moreover, given the competency concerns and knowledge levels of
female investors, the herding tendency is especially widespread among female
investors. This could affect their equity investments.

2|Page