What individual investors value: Some Australian evidence

More than 50% of Australians own shares either directly or through managed funds. As the 'baby boomers' age, government policy is encouraging individuals to take responsibility for their own retirement income, suggesting this figure is likely to rise. Despite the importance of individuals' investment decisions, however, we know little about the factors that influence them. The present study uses a conjoint analysis approach, which has previously been used in non-financial product choice research, to investigate the attributes that influence individual investors when they make a decision to buy shares. The results obtained suggest that the majority of individual investors have little interest in speculation and are, by nature, long-term investors. In deciding to buy a particular stock, financial measures, such as dividend and price-earnings ratio are relevant. However, they are less important than the company's management or recent movements in the share's price. (C) 2003 Elsevier B.V. All rights reserved.