This study aims to analyze the effects of nine cognitive biases and six emotional biases on investment decisions among young investors, while examining the moderating role of financial literacy. Employing an associative design with a quantitative descriptive approach, this research surveyed 100 investors aged 18–30—categorized as the youngest investor segment by the Indonesia Central Securities Depository (KSEI)—residing in Denpasar. Data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with a Moderated Regression Analysis (MRA) approach. The findings reveal that both cognitive and emotional biases negatively affect investment decisions. Moreover, financial literacy significantly moderates the impact of cognitive biases but is ineffective in reducing the influence of emotional biases. These findings offer valuable implications for designing more targeted financial literacy programs aimed at minimizing behavioral distortions in investment decision-making, particularly among young investors.
Negara et al. (Thu,) studied this question.