Assessing the factors that affect the behavior of individual investors on the Vietnamese stock market

BANKING ACADEMY

FOREIGN LANGUAGE FACULTY

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GRADUATION THESIS

Assessing the factors that affect the behavior

of individual investors on the Vietnamese stock market

Supervisor

Student name

Class

Faculty

Student ID

: Associate Prof. Dr. Tran Thi Xuan Anh

: Nguyen Thi Huyen

: K20 ATCC

: Foreign Language

: 20A7510078

Hanoi, May, 2021

CERTIFICATE OF ORIGINALITY

I declare that this thesis is my work, with the consultation of Associate Professor

Ph.D.Tran Thi Xuan Anh. The results and figures are honest and accurate, do not

copy any other thesis. The entire content of this thesis is presented on my own and

compiled from legally cited sources

If I find out that copying other research results is found, I take full the responsibility

Students perform

Nguyen Thi Huyen

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ACKNOWLEDGEMENTS

I would like to express my deep gratitude to Banking Academy for creating good

conditions in terms of facilities and quality of training for me to study.

I would like to express my deep and sincere gratitude to my Tran Thi Xuan Anh

lecturer who has directly guided for me to complete this thesis. She has provided

invaluable guidance throughout this thesis. It was a great privilege and honor to

work and study under her guidance

I would like to say thanks to teachers of the faculty of foreign language - Banking

Academy

In addition, I am extremely grateful to my parents for their love, caring and

sacrifices for educating and preparing me for my future.

I am extending my thanks to friends for their help and support during my study at

banking academy.

Thank you sincerely!

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TABLE OF CONTENTS

Abstract.......................................................................................................................................................1

Chapter 1: Introduction

1.1 Introduction....................................................................................................................................... 2

1.2 Background of the study .............................................................................................................. 3

1.3 Objectives of study........................................................................................................................... 3

1.4 Significance of study...................................................................................................................... 3

1.5 Scope and limitation of the study............................................................................................. 3

1.6 Definitions of terms........................................................................................................................ 4

Chapter 2: Review of related literature

2.1 Literature review.............................................................................................................................. 5

2.1.1 The Behavioral Finance Theory

-Introduction of the theory ................................................................................................................... 5

-The basic contents of behavioral finance theory....................................................................... 6

-Review of previous studies about behavioral finance theory.............................................. 7

2.1.2 Two methods by which the investment decision is influenced

-The fundamental analysis................................................................................................................... 7

-The technical analysis...........................................................................................................................9

2.2. Theoretical and Conceptual framework

Chapter 3. Methodology..................................................................................................................12

3.1. Locate of the study...................................................................................................................... 12

3.2.Research Design...........................................................................................................................12

3.3. Data gathering procedure .......................................................................................................13

3.4. Population and Sample description.....................................................................................13

3.5. Research instrument..................................................................................................................13

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3.6. Research ethics............................................................................................................................. 14

3.7. Reliability and validity .............................................................................................................. 14

CHAPTER 4: FINDINGS AND DISCUSSION

4.1. Data description

4.1.1. Classification of investors by gender................................................................................16

4.1.2. Classification of investors by age.......................................................................................16

4.1.3. Classification of investors by the annual income....................................................... 17

4.1.4. Classification of investors by the academic level........................................................18

4.1.5.Classification of investors by the risk preference.........................................................18

4.2. Factors impacting investors in the Vietnam stock market

4.2.1 The level of impact of the “Reputation of the issuing company” factor on

individual investors' behavior..........................................................................................................19

4.2.1.1. The degree of impact of the "Reputation of the issuing company" factor on

individual investors' behavior in terms of gender....................................................................20

4.2.1.2 The degree of impact of the "Reputation of the issuing company" factor on

individual investors' behavior in terms of age ...........................................................................20

4.2.1.3 The degree of impact of the "Reputation of the issuing company" factor on

individual investors' behavior in terms of annual income ....................................................20

4.2.1.4 The degree of impact of the "Reputation of the issuing company" factor on

individual investors' behavior in terms of educational level ...............................................21

4.2.1.5 The degree of impact of the "Reputation of the issuing company" factor on

individual investors' behavior in terms of risk preference ...................................................22

4.2.2. The degree of impact of the "Fundamental analysis" method on the behavior

of individual investors.........................................................................................................................22

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4.2.2.1. The level of impact of the “Fundamental analysis” method on individual

investors' behavior in terms of gender criteria ..........................................................................23

4.2.2.2. The level of impact of the “Fundamental analysis” method on individual

investors' behavior in terms of age .................................................................................................24

4.2.2.3. The level of impact of the “Fundamental analysis” method on individual

investors' behavior in terms of the annual income..................................................................24

4.2.2.4. The level of impact of the “Fundamental analysis” method on individual

investors' behavior in terms of the educational level.............................................................25

4.2.2.5. The level of impact of the “Fundamental analysis” method on individual

investors' behavior in terms of the risk preference..................................................................25

4.2.3. The degree of impact of the "Technical analysis" method on individual

investors' behavior................................................................................................................................26

4.2.3.1. The level of impact of the “Technical analysis” method on individual

investors' behavior in terms of gender .........................................................................................27

4.2.3.2. The level of impact of the “Technical analysis” method on individual

investors' behavior in terms of age ................................................................................................ 27

4.2.3.3. The level of impact of the “Technical analysis” method on individual

investors' behavior in terms of the annual income...................................................................28

4.2.3.4. The level of impact of the “Technical analysis” method on individual

investors' behavior in terms of the educational level............................................................. 29

4.2.3.5. The level of impact of the “Technical analysis” method on individual

investors' behavior in terms of the risk preference ..................................................................29

4.2.4 The degree of impact of the " Recommendation of counselors" factor on

individual investors' decision… .......................................................................................................30

4.2.4.1. The level of impact of the “Recommendation of counselors” factor on

individual investors' behavior in terms of gender criteria ....................................................31

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4.2.4.2. The level of impact of the “Recommendation of counselors” factor on

individual investors' behavior in terms of age ...........................................................................31

4.2.4.3. The level of impact of the “Recommendation of counselors” factor on

individual investors' behavior in terms of the annual income ............................................32

4.2.4.4. The level of impact of the “Recommendation of counselors” factor on

individual investors' behavior in terms of the educational level........................................32

4.2.4.5. The level of impact of the “Recommendation of counselors” factor on

individual investors’ behavior in terms of the risk preference ...........................................33

4.2.5. The degree of impact of the "Herd behavior" factor on individual investors'

behavior:

4.2.5.1. The level of impact of the “Herd behavior” factor on individual investors'

behavior in terms of gender...............................................................................................................35

4.2.5.2. The level of impact of the “Herd behavior” factor on individual investors'

behavior in terms of age ......................................................................................................................35

4.2.5.3. The level of impact of the “Herd behavior” factor on individual investors'

behavior in terms of the annual income .......................................................................................36

4.2.5.4. The level of impact of the “Herd behavior” factor on individual investors'

behavior in terms of the educational level...................................................................................37

4.2.5.5. The level of impact of the “Herd behavior” factor on individual investors'

behavior in terms of the risk preference...................................................................................... 37

4.2.6. The degree of impact of the " Overconfidence" factor on individual investors’

behavior.................................................................................................................................................... 38

4.2.6.1. The level of impact of the “Overconfidence” factor on individual investors'

behavior in terms of gender............................................................................................................39

4.2.6.2. The level of impact of the “Overconfidence” factor on individual investors'

behavior in terms of age ....................................................................................................................40

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4.2.6.3. The level of impact of the “Overconfidence” factor on individual investors'

behavior in terms of the annual income .......................................................................................40

4.2.6.4. The level of impact of the “Overconfidence” factor on individual investors'

behavior in terms of the educational level...................................................................................41

4.2.6.5. The level of impact of the “Overconfidence” factor on individual investors'

behavior in terms of the risk preference....................................................................................42

4.3. Assessing factors affecting investor behavior on the Vietnamese stock market

in the current time

4.3.1. The reputation of the issuing company factor ............................................................. 42

-Advantages

- Disadvantages

4.3.2. The "Fundamental analysis" method................................................................................43

-Advantages

- Disadvantages

4.3.3. The “ Technical analysis” method ................................................................................... 44

-Advantages

- Disadvantages

4.3.4 The “Recommendation of counselors” factor ...............................................................44

-Advantages

- Disadvantages

4.3.5. The “Herd behavior” factor.................................................................................................44

-Advantages

- Disadvantages

4.3.6 The “Overconfidence” factor................................................................................................45

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-Advantages

- Disadvantages

CHAPTER 5: CONCLUSION AND RECOMMENDATION

5.1. Summary of the findings......................................................................................................... 46

5.2. Recommendations........................................................................................................................47

a. Individual investors on the Vietnam stock market

b. Stock companies

c. Companies listed on the stock market

d. State management agencies

5.3 Final thoughts................................................................................................................................51

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LIST OF TABLES

Table 4.2.1.1: The level of impact of the "Reputation of the issuer" factor by gender

Table 4.2.1.2: The level of impact of the "Reputation of the issuer" factor by age

Table 4.2.1.3: The level of impact of the "Reputation of the issuer" factor by the

annual income

Table 4.2.1.4: The level of impact of the "Reputation of the issuer" factor by the

educational level

Table 4.2.1.5: The level of impact of the "Reputation of the issuer" factor by the risk

preference

Table 4.2.2.1: The level of impact of the "Fundamental analysis” method by gender

Table 4.2.2.2: The level of impact of the "Fundamental analysis” method by age

Table 4.2.2.3: The level of impact of the "Fundamental analysis” by the annual

income

Table 4.2.2.4: The level of impact of the "Fundamental analysis” method by the

educational level

Table 4.2.2.5: The level of impact of the "Fundamental analysis” method by the risk

reference

Table 4.2.3.1: The level of impact of the "Technical analysis” method by gender

Table 4.2.3.2: The level of impact of the "Technical analysis” method by age

Table 4.2.3.3: The level of impact of the "Technical analysis” method by the annual

income

Table 4.2.3.4: The level of impact of the "Technical analysis” method by the

educational level

Table 4.2.3.5: The level of impact of the "Technical analysis” method by the risk

preference

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