Abstract:
Portfolio investment behaviour is defined as how the investors judge, predict, analyse and
review the procedures for decision making, which includes deciding on the size of investments and
choosing the combination of investment portfolios. The investment strategies of one investor are quite
different from that of another. The motivation of an investor to invest is complex and depends upon a
number of factors.This study examined the Portfolio Investment Bahaviour of Households in the Eastern
parts of Sri Lanka in terms their portfolio investment decision on the portfolio choice and size and
identified their demographic, economic, and psychological characteristics. The study further
investigated any significant association between the portfolio investment decision and those
characteristics and any significant variation in the portfolio bahaviour caused by such personal
variables. The study was carried out among the sample of 500 households distributed all parts of the
Eastern Province of Sri Lanka. All variables were measured using an instrument designed by the
researcher and descriptive and bivariate analyses were done. Data were collected through selfadministered questionnaires which were distributed both by hands and email, and analyzed using the
software SPSS version 22.0 and MS Excel. From the data analysis, it is found that the portfolio
investment bahavioural variables are significantly varied by the demographic, economic, and
psychological factors of households. The demographic, economic and psychological factors such as
gender, age level, educational level, income level, risk averse, return preference significantly influence
their decision on portfolio investment size and choice. Hence, it is recommended that the demographic,
economic and psychological aspects shall be considered by the corporate managers in devising
investment vehicles for households in Eastern part of Sri Lanka.
