Investor Challenges in the Digitalized Retail Investment Market: An Analysis of Influencing Factors

Abstract

The introduction of digitalization and increased investor financial knowledge have significantly changed the ever-changing retail investing landscape. This study examines how financial literacy and digitization interact to influence the actions and results of retail investors. The study assesses how investors' knowledge levels and digital tools and platforms affect decision-making, risk assessment, and portfolio diversification using empirical data from a sample of retail investors. Retail investors, usually referred to as individual investors who trade using their funds, face several challenges that could make it more difficult for them to succeed in the financial markets. The study primarily focuses on the variables that influence the difficulties faced by investors in the retail investment industry. The study selected 190 individuals who made retail investments in the Chennai district. The samples were chosen using a non-probability sampling approach called convenience sampling. A research tool is a questionnaire. To determine the difficulties that investors experience, exploratory factor analysis is used. Dependability is measured using Cronbach's alpha, which is 85.1% in this study, and the data analysis was conducted using SPSS v26. The results indicate that the obstacles faced by retail investors are influenced by a number of external factors, including technical knowledge, emotional challenges, and modern digital challenges.