The Moderating Role of Self-Confidence Bias in Conservatism Among Investors in Retirement Planning

This study determined the moderating role of self-confidence bias in conservatism among the investors in Malaysian Stock Market. Data that were collected from individual investors who are aged 18 years and above in the central region such as Melaka, Selangor, and W.P Kuala Lumpur were analysed using the Partial Least Squares Structural Equation Modelling (PLS-SEM). Interestingly, conservatism becomes an important factor in trading behaviour of investors for retirement planning when it is moderated by self-confidence bias. Investors who have weak self-confidence bias when following others in making investment decisions for retirement become more risk averse than investors who have stronger self-confidence bias. Additionally, individuals who are often highly optimistic are more susceptible to conservatism that predispose them to assume a higher level of risk than those who have a weaker self-confidence bias. As trading in stock market is inevitable when making investment decision, self-confidence bias affecting the mental health of investors needs to be harnessed for better retirement planning outcomes. Thus, the policy makers must try to inculcate self-confidence among investors by constructing conducive policy and environment to enhance the efficiency of the stock market.