The Role of Fear of Missing Out (FoMO) in Herding Behavior and Overconfidence on Generation Z's Investment Decisions

Abstract

This study aims to analyze the influence of herding behavior and overconfidence on the investment decisions of Generation Z with fear of missing out (FoMO) as a moderation variable. Generation Z who grew up in the digital era has investment characteristics that are highly connected to social media, so psychological aspects such as herding behavior and overconfidence as well as emotional urges from FoMO can influence their investment decisions. This study uses a quantitative approach with the PLS-SEM method, involving 250 Generation Z respondents in Greater Jakarta who use the Stockbit application and have invested in stocks for at least six months. The results showed that herding behavior and overconfidence had a significant positive effect on Generation Z's investment decisions. These findings show that psychological aspects and social pressures are crucial factors in Generation Z's investment decisions, confirming the importance of behavior-based financial literacy in investment education policies.