Articles
DOI DOI: 10.62441/actainnovations.vi.644

INVESTOR BIASES AND THE ROLE OF FINANCIAL LITERACY ON MILLENNIAL INVESTMENT PERFORMANCE

Namira Ufrida Rahmi1, Iskandar Muda1, Erlina Erlina1, Zulkarnain1
  1. 1 Doctoral of Accounting, Universitas Sumatera Utara, Medan, Indonesia

Abstract

The 2024 data reveal a significant 15.07% increase in the number of individual investors in Indonesia, with the most notable growth observed among the younger demographic. This surge reflects not only a heightened awareness of investment opportunities but also the transformative role of financial technology (fintech) in democratizing access to digital investment platforms. The convenience, transparency, and user-friendly nature of these platforms have encouraged millennials and Gen Z investors to participate more actively in capital markets. Against this backdrop, the present study seeks to explore the complex interplay between financial behavior, information asymmetry, moral hazard, and investment performance, emphasizing the moderating influence of financial literacy. Drawing on survey data from 383 individual investors across Indonesia, the research employs Structural Equation Modeling–Partial Least Squares (SEM-PLS) to generate empirical insights. The results reveal that behavioral biases particularly heuristics and herding tendencies along with information asymmetry, exert a positive and significant impact on millennial investors’ performance. Interestingly, financial literacy emerges as a pivotal moderating variable, capable of reducing irrational tendencies and enhancing informed, rational investment decisions. These findings extend the discourse in behavioral finance by demonstrating that certain cognitive biases, under specific market conditions, may function adaptively rather than detrimentally. Conversely, moral hazard appears to have an insignificant effect, underscoring the distinct behavioral patterns characterizing Indonesia’s emerging generation of investors.

How to Cite

Rahmi, N. U., Muda, I., Erlina, E., & Zulkarnain. (2026). INVESTOR BIASES AND THE ROLE OF FINANCIAL LITERACY ON MILLENNIAL INVESTMENT PERFORMANCE. ACTA INNOVATIONS, 61, 583–595. https://doi.org/10.62441/actainnovations.vi.644
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