Abstract:
The stock market behaves according to investors' rational decisions and is reflected by
the available market information. Contrary, prospect theory (1979) stated that the
irrational behavior of an investor effect the investment decision. Investors are
concerned about maximizing their profit at minimum cost. This study primarily focuses
to check investors' behavior in the short and long-term investment intentions. This
study is unique because it investigated how financial literacy, emotional intelligence,
and cognitive biases (Overconfidence, disposition effect, and heuristic bias) affect
investment intentions via the intervening effect of risk perception and the moderating
role of personality traits. This study also examines the direct and indirect effects (via
investors’ risk perception) of cognitive biases on the investor's intentions. 528
questionnaires are correctly entered and the results are generalized to the whole
population related to the investors of the Pakistan Stock Exchange. For getting the
responses from the target population, convenience base sampling is used. AMOS is
applied as statistical software for validity and inferential concerns. Confirmatory factor
analysis and exploratory factor analysis are used for the confirmation and extraction of
items. Moreover, Validity is applied through Discriminant and Convergent validity.
Process Macro, proposed by Hayes (2017) applied to check the mediation and
moderation results. Questionnaires are distributed to investors registered on Pakistan
Stock Exchange. The results show that neurotic investor behavior moderates the
overconfidence, heuristic and investment intention during the short term period. But
other personality traits having no moderation under the short-term period. Results also
add in the literature that the relationship between the disposition effect and investment
intention does not impact under long-term investment. The finding of this study
recommended that other behavioral biases can also impact decision-making so those
biases should be used as independent variables. It is also recommended that the study
must be done on the commodity market and comparison should occur between the
behavior of stock exchange and commodity market investors
