A Conceptual Study on the Influence of Financial Literacy and Behavioral Biases on Generation Z Investment Decision Making in the Stock

The number of investors in Indonesia is rapidly growing in the stock market. The most rapidly growing investor comes from Generation Z with the age range of 18-25 years old. In addition, the drastic increase of Generation Z investors was followed by the increased trendline of stock market transactions in Indonesia. As normal human beings, Generation Z is not fully rational when they make transactions in the stock market, they are also affected by their financial literacy level and behavioral bias. The objective of the paper is to investigate the influence of financial literacy and several behavioral biases such as overconfidence bias, familiarity bias, availability bias, illusion of control and bandwagon effect on Generation Z’s investment decision in the stock market. In this study, the data used was gathered from previous literature to provide a clear explanation of the study’s theories and terminology as well as supporting data. The outcome of the study is the conceptual framework on the influence of financial literacy and behavioral biases on Generation Z investment decisions in the stock market. From the framework, financial literacy, overconfidence bias, familiarity bias, availability bias, illusion of control and bandwagon effect have influenced Generation Z investment decisions in the stock market.