PurposeThe objective of the study is to determine the factors influencing the behavior of investor in Saudi Stock Market.Design/methodology/approachThe paper uses correlation analysis, factor analysis, reliability and multiple regression analysis on the primary data collected from 125 investors in Saudi Stock Market through a questionnaire distributed randomly.FindingsThe results indicate that the factors like past performance of the stocks, financial statements, firm status in industry, the reputation of the firm, and expected corporate earnings have significant influence on the behavior of investors. The factor of the image that a certain company has built for itself over the years on the basis of its financial practices is a large influencer of investor decisions as compared to advocate recommendation factors. The investment behavior is not significantly influenced by gender or age; however, it is significantly influenced by educational qualification, professional experience and investment volume.Research limitations/implicationsThis paper limits itself to study the factors that influence the behavior of investors. However, it does not address the issue of investor overconfidence and its implications for Saudi Stock Market.Practical implicationsThis research provides a road map for the investors interested in making their investment decisions by understanding the most influencing factors.Social implicationsThis research has social implications for government agencies to delineate the required legislation to regulate the investors and also to increase market efficiency. The results show that investors are strongly affected by signals from the government.Originality/valueThis research is an original contribution toward the behavioral finance field in Saudi Arabia and can be used as a reference material for investors, companies and government policymakers in Saudi Arabia. This study incorporates investors' individual characteristics and explores factors that influence investor behavior unlike some previous studies using Saudi data.

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