Mind, Markets, and Money: A Scoping Review of Stock Market Literacy in Investment Behaviour

Abstract

Stock market participation is growing rapidly today, with people, especially the youth, dreaming of making money in a short span of time. However, it is shaped by psychological, behavioural, and literacy-related factors. This paper tries to map Scopus-indexed Psychology literature on investor psychology, stock market investment, stock market literacy, and financial literacy. A scoping review design was adopted following the PRISMA-ScR model. The Scopus database was searched using the query: “investor psychology” OR “stock market investment” OR “stock market literacy” OR “financial literacy”. The search was limited to the Psychology subject area. Nine articles were retrieved. After full screening of the texts, one article was excluded because it was marked as retracted. Eight articles were included in the final synthesis. Data were charted according to author, year, context, aim, method, sample, psychological focus, financial literacy or stock market link, and key findings. The included studies show that investment patterns are greatly influenced by financial literacy, self-assessed knowledge, overconfidence, herding, anchoring, regret aversion, risk perception, emotional priming, investor calibration, and gambling-like trading behaviour. To some extent, financial literacy may reduce the negative effects of some behavioural biases, but objective knowledge alone does not fully explain investor behaviour. The review also suggests that stock market behaviour should be understood as a psychological and behavioural process rather than merely a financial activity.