The Effect Of Financial Literacy And Risk Perception On The Selection Of Investment Instruments Decision Among Generation Z In Greater Jakarta And Bandung

Abstract

In the last 2 years, more people aware of the urgency of investing. Indonesian Securities Central Custodian recorded that from 2018 to 2021, investors in 4 major instruments (Stock market, Mutual Funds, Capital Market, and Government Securities) are experiencing an increase in the number of investors, ranging from 45% and 82% annually. Meanwhile, the rise of this investment intention among people in Indonesia also raised fraud investment. The recent most popular one is Binary Options fraud, promoted by their brand ambassador that will incentivize every member that joins through their referral. Previous studies found that those financially literate and have a high perception of risk will be more likely to avoid fraud investment. Therefore, this study aims to assess the effect of Financial Literacy and Risk Perception on the selection of investment instrument decisions among Generation Z in Greater Bandung and Greater Jakarta. This study used a quantitative approach with 250 respondents using a questionnaire and analyzed by PLS-SEM. To conclude, this research proves that both Financial Literacy and Risk Perception significantly and positively affected Generation - Z Investment decisions.

Keywords: Financial Literacy, Investment Decision, Risk Perception