The Effect of Behavioral Finance on Stock Investment Decisions

Validity

Two methods were used to confirm the content validity: First, multiple sources of data (literatures and arbitrators) were used to develop and refine the model and measures. The researcher arbitrated the questionnaire by asking researchers, professors and PhD degree holders with different specialties such as finance, business administrator and statistical analysis then took their notes and views to develop the questionnaire. The second method of Pearson's Principal Component factor analysis was applied for all items included in the questionnaire. According to Vallejo factor analysis helps to establish construct validity of what you are measuring. Moreover, factor loading value below 0.4 should be removed. Table 3 shows that all variables and variable items were valid, since their factor loading values were more than 0.4.