The purpose of this research is to find out whether retail investor trading activity was influenced by their financial attitude during the COVID-19 pandemic. The research follows the descriptive and causal research design on a sample size of 87 retail investors obtained through snowball sampling method in which respondents were first identified with the help of financial advisors from five brokerage companies in Oman. The identified respondents were requested to forward the Google survey form to other participants. The study results reveal that the majority of the respondents were in agreement that they can be optimistic regardless of the current COVID-19 situation. There was found to be no difference in the mean rating given by Omanis and non-Omanis towards financial anxiety, optimism, financial security, precautionary savings, financial literacy, financial satisfaction, and risk involvement. Nationality matters only for investor confidence as the mean ratings given for it differ between Omanis and non-Omanis.
TopIntroduction
Behavior finance is the attempt to understand the reasoning pattern. This includes the emotional process involved and how much it influences the investor’s decision-making process. It is -in general terms- the what, why and how of finance. The concept of behavior finance is also associated with psychology, since it is a study of reactions that are based on a given situation, that explains the reasons behind such behavior. As such, the decisions made as a result of utilizing the understanding of finance. In addition to that, behavioural finance refers to the application of psychology to finance. According to behavioural finance, individuals' views and conduct influence their financial decisions and financial markets. This will help to examine the impact of psychology on financial practitioners' behaviour and how that affects stock markets (Kapoor. S., et al, 2017).
Any news or information that is available for the investor can play a major role in influencing investment markets. Investment behaviour is the reaction that is based on the uncertainty about the future. Risk involvement is also a major concept that contributes to explaining investment behaviour. It is only natural for every investor to have a different perspective depending on who they are as a person, therefore, some investors are willing to take risk for better returns whereas others prefer to reduce the risk with minimal return. Information availability is also a major part of how investors react or behave during trading periods in the market (Paisarn et al., 2021).
Financial attitude is a subject that is related closely with investors behaviour, knowledge, and financial literacy (understand how finance work). Therefore, it is the state of mind that is made from the individual investors experience. (Ameliawati, and Setiyani, 2018). Personal tendency toward financial matters can be defined as financial attitude. Financial attitudes are the result of a decision-maker's behaviour, and they can be entrenched through economic and non-economic factors (Rai et al, 2019).
COVID-19 is a contagious disease that causes fever, cough, and shortness of breath in people who are infected. It spreads mostly through person-to-person contact, with infected people coughing, sneezing, or speaking, releasing respiratory droplets into the air. The COVID-19 pandemic has halted years of progress in the fight against poverty and put a generation of children's lives in jeopardy (WorldVision .org). COVID-19 caused a big drop of activities in the investment market; however, it did not stop the retail investors to take the risk of investing during such times which could possibly yield much greater returns. Also, in the aftermath of the coronavirus, the OECD predicted an increase in FDI inflows in 2012. Supply and demand shocks, combined with reduced investor price decreases, are projected to cause a further dip in direct investment in the Middle East and Africa region.
The entire planet had a global impact which suddenly caused people worldwide to get affected by this pandemic of COVID-19. The efforts to maintain stability during such difficult times were a questionable matter. Thus, we chose to tackle such problems in our research and explore what others couldn't understand yet.The coronavirus 2019 (COVID-19) has created a public fitness disaster and a financial disaster. The fast spread of the virus has had a significant influence on global financial markets. It produced an unprecedented amount of risk and resulted in huge losses for investors in a short period. (Dayong, Z. et al., 2020)