Macedonian Small Investors’ Behavior Towards Stock Market

Convenience sample survey was fielded to the Macedonian individual stock market investors to find out whether their investment behavior can be explained by some underlying factors grounded in the behavioral approach to the study of financial markets. Descriptive statistics technique has been used to analyze the investors’ attitude about the market’s efficiency and to test different theories of behavioral finance. The results have indicated that investors are not completely rational individuals as supposed by theories of traditional finance. Also in the theoretical framework of behavioral finance Macedonian investors use heuristics, or rules of thumb, when judging information and forming beliefs, but Macedonian investors do not behave as suggested within prospect theory and regret aversion.