Impact of Perceived Geopolitical Risk and Inflation on Sharia Stock Investment Through Investor Sentiment
DOI:
https://doi.org/10.56456/jebdeker.v6i2.958Keywords:
Geopolitical Risk Perception, Inflation Perception, Investment Decision, Investor Sentiment, Sharia StocksAbstract
This study analyzes the influence of perceptions of geopolitical risk and inflation on sharia stock investment decisions, with investor sentiment serving as a mediating variable. Primary data were collected from 97 active sharia stock investors in the Kudus and Semarang regions via a 5-point Likert scale questionnaire distributed online through Google Forms. Data analysis utilized Partial Least Squares-based Structural Equation Modeling (SEM-PLS) with SmartPLS software. The findings indicate that perceptions of geopolitical risk have a positive and significant influence on investment decisions and investor sentiment. Similarly, perceptions of inflation have a significant positive influence on investment decisions and investor sentiment. Investor sentiment itself has a significant influence on investment decisions and was found to act as a partial mediator in the relationship between perceptions of geopolitical risk and inflation on investment decisions. These results indicate that external factors do not empower Sharia investors but rather trigger a rational-defensive behavioral response, with investor sentiment serving as the primary psychological mechanism in the investment decision-making process. These findings have practical implications for individual investors in Sharia stocks in formulating investment strategies that are more responsive to external risks. Investors are advised not to overreact to geopolitical turmoil and inflationary pressures but rather to utilize this information rationally as a basis for decision-making. Conscious emotional management is key to ensuring that investment decisions remain focused on Sharia principles and are not solely influenced by market panic.
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