Consciousness and investment efficacy: the mediating role of mindfulness

The present paper investigates investor decision-making from a psychological standpoint and explores the role of consciousness and mindfulness on investors’ analytical ability and investment efficacy. A comprehensive survey instrument including sub-scales of different behavioural constructs is administered to 222 individual investors. We find evidence supporting the positive influence of cognitive capability on investment efficacy. The findings also suggest that mindfulness reliably mediates consciousness to cause an effect on cognitive capability. Higher cognitive capability will manifest in the form of detailed analysis and interpretation of available information and improve stock selection, asset allocation, and market timing, thus increasing investment efficacy. A mindful investor can mitigate negative stimuli, emotional turmoil, dilemmas and distress in stock trading in a far more superior way to mediate consciousness for higher cognitive capability. The implications of the study indicate that consciousness and mindfulness-based interventions may facilitate making the investors stronger to manage difficult times and perform a careful rational assessment to eventually become successful investors.