Factors Influence Investors Decision Making for Equity Portfolio Selection in Tanzania

Social Science

The study explored the relationship between investment market environment and diversified equity portfolio decision implies that the greater the awareness on the market environment, the more enhanced decision on diversification for investment portfolio selection in the Dar es Salaam region. The deviate from the typical rationale governing portfolio selection decisions through the analysis of their asset preferences and investment criteria. The population of the study was composed of 472 investor companies for general business in Dar es Salaam, Tanzania. The sample size has been taken 24 companies from the total number of general business investors who have invested and working with the Bank of Tanzania (BOT. The descriptive correlational research design was employed to answer the objective and test the hypothesis. Thus, for objective one, two and four was analyzed using descriptive statistics, objective three and five were analyzed using multiple regression analysis, Content Valid Index (CVI) and ANOVA. The level of significance (α) was 0.05. Results show that high return on investment (mean = 4.25), diversification (mean = 3.33, imitation and following (mean = 3.88) investment flexibility (mean = 3.04), investment status and prestige (mean = 3.13) were extremely adequate for equity diversified portfolio selection decision making. Findings reveal that there is a very high chance of investors to make more income out of their investments than they are presently making. There is a need to provide investors with information flow from the Banks in Tanzania and other financial institutions on investment portfolio selection. This study serves as an eye-opener to investors and managers of companies to plan for business projects and equity investments in Dar es Salaam.

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