The Impact of Heuristic Biases on Investors’ Investment Decision Making; Evidence from Colombo Stock Exchange

This paper aims to investigate the impact of heuristic biases on decision making individual investors’ who are actively trading Colombo Stock Exchange (CSE). Most studies focus well-developed financial markets and very little is known about behaviour in less developed or emerging markets. The present study contributes filling this gap literature. Investors’ have been measured using a five-point Likert scale questionnaire which contained numerous items including indicators investment decisions. sample consists 140 investors CSE. systematic random sampling technique was used for data collection. To examine making, hypotheses were tested by multiple regression analysis. results suggest that, there significant from bias create initial piece information (Anchoring adjustment bias) over making. But other such as overconfidence bias, representativeness availability not much significantly inspires avoid relying when investments. It provides awareness understanding management could be really worth makers professionals institutions, portfolio managers traders commercial banks, banks mutual funds. helps select better tools repeating expensive errors, occur because biases. So, it necessary specific strategy control mental mistakes due