Factors Affecting Individual Investors Stock Investment Decision in Butwal City, Nepal

Investment decision-making is one of the most critical aspects of financial behavior among individual investors in the stock market. Traditional financial theories assume investors act rationally, focusing on profit maximization, whereas behavioral and situational factors often shape real-world investment choices. This study aims to analyze the relationship between company factor, herding factor, risk and return factor, and market factor on the investment decisions of individual investors in Butwal City, Nepal. The study used descriptive research design and collected data through a structured questionnaire from 375 investors in Butwal city. The collected data were analyzed using statistical methods such as descriptive analysis, correlation, and regression. The study tested eight hypotheses, assuming that all four factors would positively affect investment decisions. The findings revealed that herding, risk and return, and market factors significantly influence investment decisions, while company factors showed an insignificant effect. The study concludes that investors in Butwal are more affected by market trends, perceived returns, and peer influence than by internal company performance.