The Effect of Fear of Missing Out (FOMO), Financial Self-efficacy, and Risk Tolerance on Stock Investment Decisions with Investment Intention as a Mediating Variable
Indra Bashuni Wijaya *
Widyatama University, Jawa Barat, Indonesia.
*Author to whom correspondence should be addressed.
Abstract
Purpose: This study aims to examine the effects of Fear of Missing Out (FOMO), Financial Self-Efficacy, and Risk Tolerance on Stock Investment Decision among individual stock investors in Indonesia. Furthermore, this study investigates the mediating role of Investment Intention in explaining the relationships between these psychological factors and stock investment decision-making.
Research Design: This study employed a quantitative research approach using an explanatory research design to examine the causal relationships among the proposed variables.
Research Setting and Duration: The study was conducted among individual stock investors in Indonesia. Data were collected through an online survey during the 2026 research period.
Methodology: Primary data were collected using a structured questionnaire distributed online to Indonesian stock investors who met the predetermined sampling criteria. A purposive sampling technique was employed, resulting in 100 valid respondents. The measurement instruments for Fear of Missing Out (FOMO), Financial Self-Efficacy, Risk Tolerance, Investment Intention, and Stock Investment Decision were adapted from previously validated studies. Data were analysed using SmartPLS 4 based on the Partial Least Squares Structural Equation Modelling (PLS-SEM) approach. The analysis included the assessment of the measurement model through indicator reliability, convergent validity, discriminant validity, and internal consistency reliability, followed by structural model evaluation and hypothesis testing using the bootstrapping procedure.
Findings: The results indicate that Fear of Missing Out (FOMO), Financial Self-Efficacy, and Risk Tolerance have positive and significant effects on both Investment Intention and Stock Investment Decision. In addition, Investment Intention has a significant positive effect on Stock Investment Decision and significantly mediates the relationships between Fear of Missing Out, Financial Self-Efficacy, Risk Tolerance, and Stock Investment Decision. The structural model also demonstrates satisfactory explanatory power and predictive capability, indicating that the proposed model effectively explains stock investment decision-making among Indonesian individual investors.
Conclusion: The findings confirm that psychological factors play a crucial role in shaping stock investment decisions. Investors with higher levels of Financial Self-Efficacy, greater Risk Tolerance, and stronger Fear of Missing Out tend to exhibit stronger investment intentions, which subsequently lead to more active stock investment decisions. This study contributes to the behavioural finance literature by integrating these psychological factors within the framework of the Theory of Planned Behaviour and highlights the importance of Investment Intention as a mediating mechanism linking investors' psychological characteristics to actual investment decisions.
Keywords: Fear of missing out, financial self-efficacy, risk tolerance, investment intention, stock investment decision, behavioural finance