FACTORS AFFECTING THE INVESTMENT DECISION ON STOCK

Turkish Journal of Physiotherapy and Rehabilitation; 32(2) ISSN 2651-4451 | e-ISSN 2651-446X

www.turkjphysiotherrehabil.org 3884

FACTORS AFFECTING THE INVESTMENT DECISION ON STOCK INVESTORS DURING PANDEMIC COVID 19

Imas Anita1, Jeff Noviandri Tampubolon2, Andry Arifian Rachman3 1,2,3 Widyatama University, Bandung, Indonesia

[email protected]

ABSTRACT

The purpose of this study is to examine and analyze the effect of financial literacy on investment decisions, the effect of risk tolerance on investment decisions, the effect of stock analysis on investment decisions, and the effect of advocate recommendations on investment decisions. The method used in this study is a method cross-sectional with a quantitative approach. The number of samples in this study is 100 stock investors at PT Investindo Nusantara Sekuritas. The results show that financial literacy has no significant effects on investment decisions, financial tolerance has a significant effect on investment decisions, stock analysis has a significant effect on investment decisions,and advocate recommendations have a significant.

Keywords: financial literacy, risk tolerance, stock analysis, advocate recommendations, investment decisions

I. INTRODUCTION

The existence of the capital market industry plays an important role in the growth of the investment economy in a country, including Indonesia. The driving force of the economy will occur if investment grows and develops rapidly. The capital market is the same as other markets, where sellers and buyers meet and transact, however, the trades that are transacted in the capital market are capital and/or representative assets such as stocks, bonds, mutual funds, exchange-traded funds, and derivatives.

The attractiveness of the Indonesian capital market is very strong for investors. In recent years the Indonesian capital market has experienced fluctuations amidst the turmoil of the national economy as well as the uncertainty of the global economic situation and the COVID-19 pandemic that has hit many countries. Minister of Finance of the Republic of Indonesia Sri Mulyani explained that the heaviest pressure occurred when cases of the COVID-19 virus were discovered in Indonesia, the global consumers and business confidence index also experienced a sharp decline, even exceeding the level of decline during the 2008 crisis. This index shows investor anxiety in the stock market. This has made stock markets in both developed and developing countries experience turmoil (https://news.ddtc.co.id).

The impact of the Covid-19 pandemic greatly affected the performance of the global and national financial sector including the capital market. For example, the Jakarta Composite Index (IHSG) also fluctuated and reached its lowest level at 3,937 on March 24, 2020.

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Fig 1. IDX composite, volume, value and average monthly daily trade frequency period July 2019-June 2020

Information: * in million, ** in Rp. Billion, *** in thousands.

Source: OJK Capital Market Statistics 2019 - 2020

To keep the Indonesian Capital Market afloat amidst market fluctuations along with uncertainty due to the COVID-19 pandemic, the Financial Services Authority together with the Self-Regulatory Organization (SRO) of the capital market in Indonesia, namely PT Bursa Efek Indonesia (IDX), PT Kliring Penjaminan Efek Indonesia (KPEI), and PT Kustodian Sentral Efek Indonesia (KSEI) establish preventive policies which include buybacks of shares by Issuers or Public Companies without first obtaining approval from the General Meeting of Shareholders (GMS). ), an extension of the deadline for submission of the 2019 Annual Financial Statements, an extension of the deadline for holding the Annual GMS, changing the limit auto rejection on trading regulations on the IDX, prohibiting transactions short selling for all Exchange Members, implementing halt trading for 30 minutes if the JCI has decreased to 5% as well as adjusting the value haircut and the calculation of the risk (risk charge) for market stimulation.

The Indonesian Capital Market recorded a positive development, the IDX until 31 June 2020 which managed to list 28 new shares (https://www.idx.co.id) and is at the same time the highest among the Stock Exchange Association of Southeast Asian Nations (ASEAN), followed by 9 new shares in Malaysia (HTTPS //: www.bursamalaysia.com), 6 new shares in Singapore (https://www.sgx.com), 2 new shares in Thailand (https: //www.set.or .th), and 1 new share in the Philippines (https: //www.pse.com.ph).

KSEI noted that the number of Single Investor Identification (SID) in the Indonesian Capital Market as of June 2020 grew by 43% from last July 2019 to 2,920,373 SID. The condition of the COVID-19 pandemic has not dampened investors' interest in stock transactions. This is marked by the increase in trading activity on the IDX in the period January 2020 to June 2020, recorded as an average daily transaction value of Rp. 7,667 trillion, with an average trading volume of 7.635 billion shares and an average frequency of reaching Rp. 513 thousand times.

Based on the results of Survey National Financial Literacy (SNLK) in 2013 organized by the FSA shows that people tend to still lack an understanding of financial concepts and do not have the knowledge to make financial decisions so that literacy and financial inclusion become one focus of the FSA policy. In 2015, the IDX conducted a survey conducted in 9 major cities in Indonesia, showing that the level of literacy (understanding) and inclusion (awareness) of the Indonesian people towards investment in the capital market is still lacking. On 12 November 2015, the "Yuk Nabung Saham" (YNS) campaign was launched by the Vice President of the Republic of Indonesia Jusuf Kalla. The IDX also invites all Indonesians through the YNS campaign to start investing in the capital market. By providing knowledge to the public about the ins and outs of capital market investment, the IDX wants to increase awareness of the importance of investing in stocks, increasing the number

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IDX Composite Volume*

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of local investors as well as the welfare of the Indonesian economy. Increasing the level of financial literacy and inclusion will lead a person to have the ability to determine products that suit their needs and abilities in which turn will help in making investment decisions. Pranyoto, Siregar, and Depiana (2018) show that financial literacy has a significant effect on financial behavior in making investment decisions.

This study is aimed at determining whether financial literacy affects investment decisions, risk tolerance affects investment decisions, stock analysis affects investment decisions and advocates' recommendations affect investment decisions.

II. LITERATURE REVIEW

Literature Review Investment decision

Investment is the postponement of current consumption to be included in productive assets for a certain period (Hartono, 2017: 5). There are two attitudes of investors in making investment decisions according to Putra et al. (2016: 271), namely rational and irrational attitudes. A rational attitude is the attitude of someone who thinks based on common sense, while an irrational attitude is the attitude of someone who thinks that is not based on common sense. Investments are current commitments of money or other resources with the hope of obtaining future benefits. Investments in financial assets consist of stocks, bonds, or options and futures contracts. The collection of these financial assets is called an investment portfolio. The formation of an investment portfolio is followed by the investment decision stage of asset allocation and selection (Bodie, Kane, & Marcus, 2014).

Investors make their investment decisions based on rational reasons and based on available information that never accurately describes existing market conditions (Pak & Mahmood, 2015). Making investment decisions is a very crucial process that is influenced by many factors. Investment decision-makers require special consideration so that they can be understood by investors (Awais, Laber, Rasheed, & Khursheed, 2016).

Financial literacy financial

Literacy is defined as an understanding of basic economic knowledge and financial concepts, as well as the ability to use this knowledge to manage financial resources (Thapa & Nepal, 2015: 51). Financial literacy according to the Financial Services Authority (2014) is knowledge, skills, and beliefs that influence attitudes and behavior to improve the quality of decision making and financial management to achieve prosperity.

Financial literacy is a tool to measure how well an individual can understand and use personal financial information. Financial literacy enables a person to improve his overall well-being (Abdullan & Chong (2014: 4). Financial literacy helps a person to improve one's level of understanding to deal with financial problems that make it possible to process financial information and then make the right decisions for personal finances. Direct financial literacy affects a person's welfare (Margaretha & Sari, 2015: 134).

According to research Fedorova, Nekhaenko, & Dovzhenko(2015), each citizen is important to have a good level of financial literacy, the goal will lead to an increase in the standard of living and trust. on the stability and prosperity of the future economy and society as a whole by comparing the levels of financial literacy in Malaysia and the UK by utilizing the survey results from a questionnaire developed by the Organization for Economic Co-operation and Development (OECD) which uses demographic factors I and socio-economic factors that affect the level of financial literacy. The results show that overall the level of financial literacy in both countries is low and the actions that need to be taken by the government to raise awareness about financial issues (Janor, Yakob, Hashim, Zanariah, & Wel, 2016).

Risk tolerance risk

Risk Tolerance Risk is a measure of the uncertainty of the rate of return obtained from an investment or the variability of the rate of return on an asset (Gitman and Zutter, 2015). According to Armstrong(2008), the risk is the only reason why every investor does not want equity for their long-term investment. Many investors have an excessive fear of risk, often believing that risk equals the total possible loss that will be incurred. This misunderstanding can prevent them from making rational choices for their accumulated needs. Risk Tolerance is the tolerance given by investors to the risks that will be accepted (Wulandari and Iramani, 2014).




Risk tolerance is the level of ability an investor can accept in taking investment risk. Risk tolerance is the maximum amount a person can accept risk or uncertainty when making an investment decision (Grable, 2000). Every investor has a different level of risk tolerance. Most young investors take too much risk in making inappropriate investment decisions. There is much more fun than assessing risk tolerance so this process can be done only once and then forget about it. If investors are determined to try to beat the market, some outcomes are very predictable and may take more risk than necessary to achieve returns (Merriman & Buck, 2012).

Analysis of shares

The definition of shares according to Darmadji and Fakhruddin (2001: 5) is a sign of the participation or ownership of a person or legal entity in a company or limited liability company. The form of shares is a sheet of paper that that states that the owner of the paper is the owner of the company issuing the securities. Short-term or long-term investment objectives have consequences on the choice of different analyzes. Short-term investment objectives are more appropriate using technical analysis while long-term investment objectives are very suitable using fundamental analysis. According to Husnan(2019), there are two basic approaches to analyzing and selecting stocks, namely fundamental analysis, and technical analysis. According to Petrusheva & Jordanoski(2016) that fundamental analysis and technical analysis differ in many aspects, from the assumptions on which they are based, the methods used to the functions they have. This difference shows that fundamental analysis and technical analysis are basic different strategies in making investment decisions, but to provide optimal results, the two analyzes have advantages and disadvantages that can be combined.

Advocate recommendations

The General Indonesian Dictionary states: Advocates are lawyers or legal experts who are authorized to act as advisors or defenders of cases in court. According to Graham & Zweig (2003), most investors are amateurs, so they need to ask professionals to help in choosing securities. Investment recommendations can be obtained from a variety of sources, including relatives or friends with knowledge of securities, commercial bankers, brokerage firms or investment banking firms, financial services or periodicals, and financial advisors. Expert recommendations have the potential to improve the quality of investment decisions and investors can realize investment returns from these recommendations. From an investment perspective, portfolios after using expert recommendations tend to be more efficient and have higher expected returns (Blanchett, 2014).

Hypothesis Development

Effect of financial literacy on investment decisions

Financial literacy is the ability of an individual to make decisions in terms of personal financial arrangements (Margaretha & Pambudi (2015: 76). Financial literacy has an additional application dimension which states that an individual must have the ability and confidence to use financial knowledge in making financial decisions (Kozina & Ponikvar, 2015: 242) This financial literacy should affect a person's behavior in managing finances and making investment decisions (Al-Tamimi and Kalli 2005). The better a person's financial literacy level is, the wiser the person is in making financial decisions (Lusardi and Mitchel 2009; Hilgert, Hogarth, and Beverly 2003). Financial literacy related to compound interest affects a person's ability to plan for retirement (Lusardi and Mitchel 2009). Investors with low financial literacy are less likely to own stocks that are sufficient, complex and high-risk financial instruments (Van Rooij, Lusardi, Alessie 2011).

H1: Financial literacy affects investment decisions

The effect of risk tolerance on investment decisions

Risk tolerance is the maximum amount a person can accept risk or uncertainty when making an investment decision (Grable, 2000). Making investment decisions is a very crucial process that is influenced by many factors. Investment decision-makers require special consideration so that they can be understood by investors (Awais, Laber, Rasheed, & Khursheed, 2016). Risk tolerance itself is a very strong factor in making investment decisions (Bailey and Kinerson, 2005).

H2: Risk tolerance affects investment decisions

The effect of stock analysis on investment decisions




One of the decisions making in investing in the capital market is that stocks must require rational and careful thinking because there are various kinds of companies listed on the Indonesia Stock Exchange. Investors must be able to analyze whether a stock that occurs is feasible to buy or not and also know what variables determine the share price whether it is fundamental, technical, or socio-political, and must also be able to detect price movements (Widyatmini and Damanik, 2009).

H3: Stock analysis affects investment decisions

Effect of advocate recommendations on investment decisions

Advocate recommendation is investor information that is influenced by various recommendations from brokers, family, friends, and portfolio management companies (Azam et al. 2013). Winchester et al. (2011) stated that investors need professional experts to study the market in investment selection so that it remains consistent when the market is dynamic.

H4: Advocate recommendations affect investment decisions

Fig 2. Research Paradigm

III. RESEARCH METHOD

According to Sekaran & Bougie (2016), cross-sectional research is a study that can be conducted with data collected only once, perhaps over days, weeks, or months, to answer research questions. The research method is essentially a combination of two ways, namely rational and empirical (Nuryaman & Christina, 2015). The approach used in this research includes a quantitative approach, which is an approach that allows for research data. This type of research is the measurement results that can be expressed in numerical form.

The variables studied in this research are the investment decisions are influenced by financial literacy indicators Knowledge, Behavior, Attitudes, and Skills. Risk tolerance with indicators of Self-esteem, Personality type, Sensation seeking. stock analysis using Macroeconomic analysis, Analysis of Gross Domestic Product (GDP), Business cycle analysis, Yield curve analysis, Inflation rate analysis, Industrial analysis, Industrial cycle analysis, Investment rotation, Analysis of financial statement, Analysis disclosure, analysis of other companies, Financial ratio analysis, Review of historical price, Review of historical volume, Use of charts, Use sentiment indicator, Use of put/call ratio, Use of moving average. and Advocate Recommendations with indicator Broker recommendation, Family member opinion, Friend or coworker recommendations, Opinions of the firm's majority stockholder, Financial advisors, and analysts' recommendation.The population used in this study was 4,134 investors who opened securities accounts at PT Investindo Nusantara Sekuritas in 2020. The number of samples in this study was 100 stock investors in PT Investindo Nusantara Sekuritas. The sampling method used in this study is a method of non-probability sampling.

The analytical method used in this study is divided into 5 stages consisting of the first stage, testing the quality of the data. The second stage, testing the classical assumptions. The third stage, testing the accuracy of the model. The fourth stage, multiple regression analysis. The fifth stage, testing the hypothesis.

IV. RESULTS AND DISCUSSION Results




Investors who opened securities accounts at PT Investindo Nusantara Sekuritas were 4,134 in 2020. The sample selection in this study was taken based on the purposive sampling technique and the number of samples used in this study was 100 investors.

Characteristics of respondents

Based on the results of a questionnaire distributed to investors at PT Investindo Nusantara Sekuritas, the authors obtained characteristic data consisting of gender, age, latest education, occupation, duration of investment, and frequency of transactions with the following descriptions.

Table 1. Characteristics of Respondents by Gender

No. Gender Frequency % 1 Male 58 58.0 2 Female 42 42.0

Total 100 100

Source: Research Data, (processed in 2021)

Table 1 describes the characteristics of respondents based on gender. Whereas from 100 respondents, the frequency of men was more dominant than women, namely men as many as 58 people or 58% and women as many as 23 people or 23%. This shows that the average investor who chooses to invest amid the Covid-19 pandemic is dominated by men.

Table 2. Characteristics of Respondents by Age

No. Age Frequency % 1 17 - 30 years 31 31 2 31 - 40 years 42 42 3 41 - 50 years 13 13 4 > 50 years 14 14

Total 100 100


Based on Table 2, it is known that the majority of investors studied were 42% aged around 31 - 40 years, the second-highest frequency was 31% around 17-30 years old, as many as 14% investors were> 50 years old and the other 13% were around 41 - 50 years. From this statement, the authors conclude that with an average investor aged 31-40 years, this shows that the average respondent is in adulthood, meaning that all investment decisions in the midst of the Covid-pandemic19have been carefully thought and calculated.

Table 3. Characteristics of Respondents Based on Latest EducationRecent

No. Education Frequency % 1 High school 16 16 2 D3 8 8 3 S1 63 63 4 S2 12 12 5 S3 1 1

Total 100 100


Table 3 describes the characteristics of the respondents based on the latest education level. From the research results, it is known that 63% of the investors studied were S1 graduates, the second-highest frequency of which was 16% were high school graduates, 12% of investors were S2 graduates, as many as 8% of investors were D3 graduates and 1% were S3 graduates. From the data above, the average respondent has a fairly high education, so that it can influence investors' decisions in investing during the Covid-19 pandemic.

Table 4. Characteristics of Respondents by Occupation




No. Occupation Frequency % 1 Student 8 8 2 Self-employed 20 20 3 PNS / BUMN 12 12 4 Private Employees 50 50 5 Others 10 10

Total 100 100


Table 4 describes the characteristics of the respondents by occupation. From these results, it is known that the majority of respondents are 50% as private employees, 20% work as entrepreneurs, 12% as civil servants / BUMN employees, 10% work in other fields, and 8% are still students. From the data above, the average investment in the Covid-19 pandemic is private employees, namely 50 people or 50% from other fields.

Table 5. Characteristics of Respondents Based on Duration of Investment

No. Duration of Investment Frequency % 1 <1 year 29 29 2 1 - 5 years 39 39 3 6 - 10 years 14 14 4 11 - 15 years 18 18 5 > 15 years 0 0

Total 100 100


Table 5 describes the characteristics of the respondents based on the length of the investment. From these results, it is known that 39% of investors have invested for 1 - 5 years, 29% of investors have invested for <1 year, 18% of investors have invested for 11 - 15 years and 14% of other investors have invested for about 6 - 10 years. The data above can be seen that those who invest in Covid -19 are dominated by investors who have 1-5 years of experience in investing, meaning that the average investor who invests in a pandemic is investors who have not been in the investment sector very long.

Table 6. Characteristics of Respondents Based on Investment Frequency

No. Transaction Frequency % 1 1 - 5 times / month 61 61 2 6 - 10 times / month 16 16 3 11 - 15 times / month 10 10 4 16 - 20 times / month 6 6 5 > 20 times / month 7 7

Total 100 100


Table 6 describes the characteristics of the respondents based on the frequency of investment. From these results it is known that most investors invest about 1 - 5 times a month, the second-highest frequency is 16% investing around 6-10 times/month, 10% of investors invest around 11 - 15 times/month, 7% investors invest about> 20 times/month and 6% of other investors invest about 16-20 times a month. From the data above, it can be seen that the average investor invests 1 - 5 times/month as many as 61 people or 61%, meaning that during the Covid-19 pandemic, stock investment tends to decrease because investors are more careful and vigilant in investing.

Validity and reliability

The validity test aims to provide confidence that the instruments used in the study measure what they want to measure (Nuryaman & Christina, 2015). Whether testing is valid or not a measuring instrument used a statistical approach, namely through the value of the correlation coefficient of the score of the statement items with the total score. If the value of r-count> r-table, then the statement is declared valid. The data reliability test is used to show the extent to which the measurement results have been consistent if two or more times of the same symptoms are carried out. The reliability test in this study used the technique Cronbach's Alpha. The instrument is said to be reliable if the Cronbach's Alpha value is greater than 0.6.




Table 7. Results of Testing Instrument Validity and Reliability Variable X1

Variable Item No. r-count r-table Conclusion Financial Literacy

(X1) 7 0.636 0.361 Valid 8 0.847 0.361 Valid 9 0.918 0.361 Valid 10 0.808 0.361 Valid

Reliability Coefficient 0.822 Critical Points 0.600 Information Reliable

Source: SPSS Version 21 output results

Based on Table 7, it can be seen that all statements submitted informing financial literacy (X1) have a value of r-count> r-table 0.361 which indicates that all statements submitted have performed their measuring function, in other words, has been declared valid. And for the results of the reliability coefficient, the value Cronbach's Alpha is 0.822, greater than 0.6, and is declared reliable, so it can be concluded that all statements submitted informing financial literacy have shown their reliability. Furthermore, the recapitulation of testing the validity and reliability of the variables X2 (tolerance of risk) can be seen in the following table.

Table 8. Test Result Validity and Reliability Instruments Variable X2

Variable Item No. r-count r-table Conclusion Risk Tolerance

(X2) 11 0495 0361 Valid 12 0.799 0.361 Valid 13 0543 0361 Valid 14 0552 0361 Valid

Reliability coefficient 0614 Critical point 0600 Description Reliable

Source: SPSS output version 21

Based on Table 8 shows that the entire statement filed in forming tolerance risk (X2) has a value of r-count> r-table 0.361 which indicates that all statements submitted have performed their measuring function, in other words, they have been declared valid. And for the results of the reliability coefficient, the Cronbach's Alpha value is 0.614, greater than 0.6, and is declared reliable, so it can be concluded that all statements put forward in forming risk tolerance have shown their reliability. Furthermore, the recapitulation of the validity and reliability test results for the Xvariable3 (stock analysis) can be seen in the following table.

Table 9. Results of Testing the Validity and Reliability of the Instrument for Variable X3

Variable Item No. r-count r-table Conclusion Stock Analysis (X3) 17 0.833 0.361 Valid

18 0.692 0.361 Valid 19 0.739 0.361 Valid 20 0.791 0.361 Valid 21 0.718 0.361 Valid 22 0.880 0.361 Valid 23 0.879 0.361 Valid 24 0.898 0.361 Valid 25 0.778 0.361 Valid 26 0.762 0.361 Valid 27 0.887 0.361 Valid 28 0.769 0.361 Valid 29 0.832 0.361 valid 30 0735 0361 valid 31 0590 0361 valid




32 0551 0361 valid 33 0647 0361 valid

Reliability coefficient 0951 Critical point 0600 Description Reliable

Source: SPSS output version 21

Table 9 shows that the entire statement filed in forming a stock analysis (X3) has the value of r-count> r-table 0.361 which shows that all statements submitted have performed their measuring function, in other words, they have been declared valid and for the results of the reliability coefficient, the value Cronbach's Alpha is 0.951 which is greater than 0.6 and is declared reliable, so it can be concluded that all statements submitted informing stock analysis have shown their reliability. Furthermore, the recapitulation of the validity and reliability test results for variable X4 (advocate recommendations) can be seen in the following table.

Table 10. Test Results of the Validity and Reliability of Instruments Variable X4

Variable Item No. r-count r-table Conclusion Advocate

Recommendations (X4)

34 0.799 0.361 Valid 35 0.776 0.361 Valid 36 0.821 0.361 Valid 37 0.810 0.361 Valid 38 0.787 0.361 Valid

Reliability Coefficient 0.851 Critical Point 0.600 Information Reliable

Source: SPSS Version 21 Output Results

Based on Table 10, it can be seen that all statements submitted in forming advocate recommendations (X4) have a value of r-count> r-table 0.361 which shows that all statements submitted have performed their measuring function. In other words, it has been stated as valid. And for the results of the reliability coefficient, the Cronbach's Alpha value is 0.851 which is greater than 0.6, and is declared reliable, so it can be concluded that all statements submitted in forming advocate recommendations have shown their reliability. Furthermore, the recapitulation of the validity and reliability test results for variable Y(investment decisions) can be seen in the following table.

Table 11. Test Results of the Validity and Reliability of the Instrument Variable Y

Variable Item No. r-count r-table Conclusion Investment Decisions

(Y) 1 0.792 0.361 Valid 2 0.527 0.361 Valid 3 0.841 0.361 Valid 4 0.736 0.361 Valid 5 0.532 0.361 Valid 6 0.756 0.361 Valid

Coefficient Reliability 0.755 Critical Points 0.600 Information Reliable

Source: SPSS Version 21 output results

Based on Table 11 it can be seen that all statements submitted informing investment decisions (Y) has a value of r-count> r-table 0.361 which indicates that all statements submitted have performed functions of the measure. In other words, it has been declared valid. And for the results of the reliability coefficient, the value Cronbach's Alpha is 0.755 which is greater than 0.6 and, is declared reliable, so it can be concluded that all statements submitted informing investment decisions have shown their reliability.




Partial hypothesis testing (t-test)

1. Partial hypothesis testing X1

H0: β1= 0 This means that financial literacy partially has no significant effect on investment decisions in stock investors during the Covid 19 pandemic.

H1: β1 ≠ 0 This means that financial literacy partially has a significant effect on investment decisions in stock investors during the Covid Pandemic 19.

With a significance level of 0.05

Criteria: Reject H0 if t> from t table, accept in other cases

By using SPSS, hypothesis testing results are obtained. partial X1 as follows:

Table 12. Partial Hypothesis Testing X1


Based on the table above, it is known that the t-count value obtained by financial literacy (X1) is 1.895. This value will be compared with the t-table value in the t distribution table. With α = 0.05, df = NK-1 = 100-4-1 = 95, the t-table value for two-party testing was ± 1.985. From the values above, it can be seen that the t-count value obtained is 1.895, which is between the t-table values (-1.985 and 1.985). By the criteria for testing the hypothesis that H0 is accepted and H1 is rejected, it means that partially financial literacy has no significant effect on investment decisions in stock investors during the Covid Pandemic 19.


H0: β2= 0 This means that risk tolerance does not partially have a significant effect on investment decisions in stock investors during the Covid 19 Pandemic.

H1: β2≠ 0 This means that risk tolerance partially has a significant effect on investment decisions in stock investors during the Covid Pandemic 19.



Using SPSS, partial hypothesis test results Xobtained2 are as follows:






Based on the table above, it is known that the t-count value obtained by risk tolerance (X2) is 2.017. This value will be compared with the t-table value in the t distribution table. With α = 0.05, df = NK-1 = 100-4-1 = 95, the t-table value for two-party testing was ± 1.985. From the values above, it can be seen that the t-count value obtained is 2.017, outside the t-table value (-1.985 and 1.985). By the criteria for testing the hypothesis that H0 is

rejected and H1 is accepted, it means that risk tolerance partially has a significant effect on investment decisions in stock investors during the Covid 19 pandemic.

3. Partial Hypothesis Testing X3

H0: β3= 0 This means that partially, stock analysis has no significant effect on investment decisions in stock investors during the Covid 19 Pandemic.

H1: β3 ≠ 0 This means that partially, stock analysis has a significant effect on investment decisions in stock investors during the Covid Pandemic 19.



Using SPSS, partial hypothesis test results Xobtained3 are as follows:



Based on the table above, it is known that the t-value obtained by the stock analysis (X3) is 4.197. This value will be compared with the t-table value in the t distribution table. With α = 0.05, df = nk-1 = 100-4-1 = 95, the t-table value for two-party testing was ± 1.985. From the values above, it can be seen that the t-count value obtained is 4.197, which is outside the t-table value (-1.985 and 1.985). By the criteria for testing the hypothesis that H0 is

rejected and H1 is accepted, it means that partial stock analysis has a significant effect on investment decisions in stock investors during the Covid Pandemic 19.


H0: β4= 0 These recommendations have no significant effect on investment decisions in stock investors during the Covid 19 Pandemic.

H1: β4 ≠0 Means that partially advocates' recommendations have a significant effect on decisions. investment in stock investors during the Covid Pandemic 19.


Criteria: Reject H0 if t> from t table, accept in other cases using SPSS, partial hypothesis test results Xobtained4

are as follows:

Table 15. Hypothesis Testing Partial X4





Based on the table above, it is known that the t-count value obtained by the advocate's recommendation (X4) is -2.174. This value will be compared with the t-table value in the t distribution table. With α = 0.05, df = nk-1 = 100-4-1 = 95, the t-table value for two-party testing was ± 1.985. From the values above, it can be seen that the t-count value obtained is -2.174, which is outside the t-table value (-1.985 and 1.985). By the criteria for testing the hypothesis that H0 is rejected and H1 is accepted, it means that partially, advocate recommendations have a significant effect on investment decisions in stock investors during the Covid Pandemic 19.

V. DISCUSSION The effect of financial literacy on investment decisions

The results of this study indicate that the financial literacy variable statistically affects investment decisions. The results of this study are also supported by previous research that financial literacy is the ability of an individual to make decisions in terms of personal financial arrangements (Margaretha & Pambudi (2015: 76). Financial literacy has an additional application dimension which states that an individual must have the ability and self-confidence. to use financial knowledge in making financial decisions (Kozina & Ponikvar, 2015: 242). This financial literacy should affect one's behavior in managing finances and investment decisions made (Al-Tamimi and Kalli 2005). The better one's financial literacy level is, the wiser the person is in making financial decisions (Lusardi and Mitchel 2009; Hilgert, Hogarth, and Beverly 2003). Financial literacy related to compound interest affects a person's ability to do retirement planning (Lusardi and Mitchel 2009). Investors that have a low financial literacy impossibly own shares which are quite complex and high-risk financial instruments (van Rooij, Lusardi, Alessie 2011).

Based on the results of research on financial literacy, it shows that there is an influence on investment decisions, but the results of the questionnaire show that there are still respondents who have the behavior of always setting aside many funds to be used to invest in the capital market, about 38 respondents or 38% who stated that they understood, 48 respondents or 48% said they understood, 11 respondents or 11% said they did not understand and 3 respondents or 3% said they did not understand. This is because many people are interested in investing in the capital market without doing some risk analysis before investing. Before investing in stocks, investors should do some analysis including monitoring the companies that will be invested, whether the company is in good condition or not. Monitoring aims to see whether the company we choose will grow and develop well and be able to provide maximum benefits for us as investors. Moreover, deciding to invest in the grip of the Covid-19 pandemic must be more careful, because at this time economic growth has decreased greatly, including in company stocks and even many companies have gone out of business. Have an attitude that is always organized in managing money, at 38 respondents or 38% who said they understood, 45 respondents or 45% said they understood, 12 respondents or 12% said they understood enough and 5 respondents or 5% said they did not. understand. This is caused by a lack of experience in investing which makes investors wrong in making decisions. and have the skills to choose financial products according to their conditions and needs, namely 34 respondents or 34% who stated they understood, 57 respondents or 57% said they understood, 8 respondents or 8% said they understood enough, and 1 respondent or 1 % who said they did not understand. This is due to the lack of education and outreach about safe stock investments that provide promising benefits in the future. Lack of education and socialization makes investors wrong in choosing companies to invest. In addition, experience also affects the investment steps that will be taken by investors, investors who have experience will be more careful and consider investing in the Covid-19 pandemic.

The effect of risk tolerance on investment decisions




Risk tolerance is the maximum amount a person can accept risk or uncertainty when making an investment decision (Grable, 2000). Making investment decisions is a very crucial process that is influenced by many factors and requires special consideration so that they can be understood by investors (Awais, Laber, Rasheed, & Khursheed, 2016). Risk tolerance itself is a very strong factor in making investment decisions (Bailey and Kinerson, 2005).

There are several research results regarding the effect of risk tolerance on investment decisions. Research conducted by Pak & Mahmood(2015) shows that risk tolerance has a positive effect on making investment decisions. Research conducted by Wulandari and Iramani (2014) shows that risk tolerance has a significant effect on investment decision-making. Research conducted by Yohnson (2008) proves that risktolerance is a variable that has a significant effect on investment decision-making. The higher one's level of risk tolerance, the more it will affect someone in making investment decisions.

Based on the results of research on risk tolerance, it shows that there is an influence on investment decisions, but the results of the questionnaire show that there are still respondents who feel rushed in making investment decisions 21 respondents or 21% who stated that they understood, 39 respondents or 39% who stated that they understood, 20 respondents or 20% who stated that they did not understand, 13 respondents or 13% who said they did not understand and 7 people or 7% who stated that they did not understand. This is due to a lack of careful planning and education for investors who will invest in shares during the Covid-19 pandemic. Lack of planning leads the decisions that are taken to work inappropriately, many investors are in a hurry to decide to invest without analyzing the risks that will be obtained will automatically choose stocks with high fluctuation 18 respondents or 18% said they understood, 48 respondents or 48% said they understood, 17 respondents or 17% said they quite understood, 10 respondents or 10% said they did not understand and 7 respondents or 7% said they were very clueless. This is due to a lack of understanding about stock investing and not mastering risk management appropriately which will cause losses for investors. Lack of understanding of stock investing makes investors make wrong decisions and seem hasty. Investors who cannot manage risk also make investors unable to analyze the condition of the company and will later affect the investment decisions taken, especially when investing in the Covid-19 pandemic must be more selective and careful, and impatient in realizing the advantages and disadvantages of investing 21 people respondents or 21% who stated that they understood, 41 respondents or 41% stated that they understood, 16 respondents or 16% stated that they quite understood and did not understand and 6 respondents or 6% stated that they did not understand. This is caused by the lack of experience and consultation with experts regarding investment, making investors rush in making investment decisions.

The effect of stock analysis on investment decisions

One of the decisions in investing in the capital market is that stocks must require rational and careful thinking because there are various types of companies listed on the Indonesia Stock Exchange. Investors must be able to analyze whether a stock that occurs is feasible to buy or not and also know what variables determine the share price whether it is fundamental, technical, or socio-political, and must also be able to detect price movements (Widyatmini and Damanik, 2009).

Based on research by Elbialy (2019), there is a significant influence using fundamental analysis and technical analysis on the effectiveness of investment decisions on the Egyptian Stock Exchange (Utami, Nugroho, & Farida, 2017).

Based on the results of research on Stock Analysis, it shows that there is an influence on investment decisions, but the results of the questionnaire show that there are still respondents who analyze the macroeconomy before investing, about 24 respondents or 24% said they understood, 53 respondents or 53% said they understood, 12 respondents or 12% who stated that they did not understand, 9 respondents or 9% stated that they did not understand and 2 respondents or 2% who stated that they did not understand. This is because the Covid-19 pandemic affects the character of investors in investing, investors who consider risks tend to withdraw their investment and invest in safer investments, while investors who are not afraid to take risks will continue to invest in stocks in the capital market. Analyzing Gross Domestic Product before investing, namely 18 respondents or 18% said they understood, 42 respondents or 42% said they understood, 23 respondents or 23% said they did not understand, 13 respondents or 13% said they did not understand and 4 respondents or 4% stated that they do not understand. This is because during the covid-19 pandemic the world of investment decreased greatly, many investors did not believe anymore to make an impression because many companies went out of business during the Covid-19 pandemic. Analyzing the business cycle before investing, namely 29 respondents or 29% who




stated that they understood, 47 respondents or 47% stated that they understood, 11 respondents or 11% stated that they did not understand, 9 respondents or 9% stated that they did not understand and 4 respondents who stated that they were very clueless. This is because, during a pandemic, investors tend to worry that the money they invest will not provide a profit, maybe even a loss, this is why it is necessary to analyze the company cycle because, during the pandemic, many companies suffered losses and even went bankrupt. And also analyze the inflation rate before investing, toillustrate 24 respondents or 24% stated that they understood, 45 respondents or 45% said they understood, 16 respondents or 16% stated that they did not understand, 11 respondents or 11% said they did not understand and 4 people respondents or 4% who stated that they did not understand. This is because during the Covid-19 pandemic the economy in Indonesia experienced a decline. People's purchasing power for goods and services has also decreased because high prices of goods made investors invest during the Covid-19 period. When cutting off investment in the Covid-19 pandemic, investors are always ready for all the possibilities that may occur, including losing profits due to inflation. Analyzing the industrial cycle before investing, around 27 respondents or 27% who stated they understood, 50 respondents or 50% said they understood, 9 respondents or 9% said they did not understand, 11 respondents or 11% said they did not understand, and 3 respondents or 3% stated that they do not understand. This is because at the time of the Covid-19 pandemic many companies were in bad condition, many investors withdrew their capital because they didn't want to lose, it was difficult to keep stock prices, people's purchasing power decreased because many people were laid off making the economy worse off. Analyzing investment rotation before investing, namely 26 respondents or 26% said they understood, 43 respondents or 43% said they understood, 16 people or 16% said they did not understand, 11 respondents or 11% said they did not understand, and 4 respondents or 4% said they did not understand. This is because during the Covid-19 period investors tended to compare several companies to see which companies were in a safe position and able to survive. Using sentiment indicators before investing, around 27 respondents or 27% who stated they understood, 45 respondents or 45% said they understood, 18 people or 18% said they did not understand, 7 respondents or 7% said they did not understand, and 3 people respondents or 3% stated that they did not understand. This is due to the lack of education for beginners playing on the stock market, so the potential for losses is wide open. One that affects the increase and decrease in stock prices. using the Put / Call Ratio indicator before investing, namely 23 respondents or 23% who stated that they understood, 35 respondents or 35% said they understood, 25 respondents or 25% said they did not understand, 14 respondents or 14% said they did not understand and 3 respondents or 3% who stated that they did not understand. This is due to a lack of understanding and experience in the stock market that makes investors make wrong decisions, especially during the Covid-19 pandemic, investors are required to be able to read and predict whether the stocks invested will develop and provide benefits or vice versa. and using the Moving Average indicator before investing, namely 24 respondents or 24% who stated they understood, 45 respondents or 45% said they understood, 19 respondents or 19% said they did not understand, 10 respondents or 10% said they did not understand and 2 people respondents or 2% stated that they do not understand. This is due to the lack of analysis carried out by investors by the Covid-19 pandemic, causing a very high risk of loss.

Effect of advocate recommendations on investment decisions

According to Graham & Zweig (2003), most investors are amateurs, so they need to ask professionals for help in choosing securities. Investment recommendations can be obtained from a variety of sources, including relatives or friends with knowledge of securities, commercial bankers, brokerage firms or investment banking firms, financial services or periodicals, and financial advisors. Expert recommendations have the potential to improve the quality of investment decisions and investors can realize investment returns from these recommendations. From an investment perspective, portfolios after using expert recommendations tend to be more efficient and have higher expected returns (Blanchett, 2014).

Full-service brokers usually rely on research staff to prepare analyzes and forecasts and often make specific buying or selling recommendations. Some investors allow the broker to make buying and selling decisions for the benefit of the investor by creating a discretionary account so that the broker can buy and sell predefined securities at any time. This action requires a high level of trust on the part of investors, as unethical brokers may over-trade securities for the sole purpose of increasing commissions (Bodie, Kane, & Marcus, 2014).

Based on the results of research on Advocate Recommendationsshows that there is an influence on investment decisions, but the results of the questionnaire show that there are still respondents who obtained recommendations from brokers/brokers in investing, about 20 respondents or 20% who stated they understood, 44 respondents or 44% said they understood, 22 respondents or 22% said they did not understand, 10 respondents or 10% said they did not understand and 4 respondents or 4% strongly disagree. This is due to a lack of




experience and consultation with blockers before choosing an investment, thus causing the risk of loss due to the wrong choice of company and get recommendations from family members in investing, namely 25 respondents or 25% who stated they understood, 45 respondents or 45% said they understood, 16 respondents or 16% said they did not understand, 10 respondents or 10% said they did not understand and 4 respondents or 4% who stated that they did not understand. This is due to the lack of communication with family members in deciding on investments, making investments made sometimes not as expected.

VI. CONCLUSION Conclusion

Based on the results of data analysis and the discussion described in the previous chapter, the authors draw the following conclusions:

Partially, financial literacy has no significant effect on investment decisions in stock investors during the Covid Pandemic 19.

Partially, risk tolerance has a significant effect on investment decisions in stock investors during the Covid 19 Pandemic.

Partially, stock analysis has a significant effect on investment decisions in stock investors during the Covid 19 Pandemic.

Partially, advocate recommendations have a significant effect on investment decisions in stock investors during the Covid 19 pandemic.

Recommendations

Prospective investors are expected to increase their knowledge of financial management which can be obtained from seminars, books, journals, and consultations with investors who have long been involved in the investment sector. So that the decisions taken are right and provide benefits for investors. Apart from investors, BIE can also socialize and provide education to new investors who have no experience in investing.

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FACTORS AFFECTING THE INVESTMENT DECISION ON STOCK