The consequences of financial literacy on investment decisions and investment performance

Due to the dynamic changes in the economic environment, particularly in financial markets, to improve the financial knowledge of investors, financial literacy is a necessity leading to informed financial decisions. This study aimed to identify the consequences of financial literacy on investors' decisions and investment performance in Tehran Stock Exchange. In this field study, a standardized questionnaire was used for data collection. The population was composed of individual investors in the Tehran Stock Exchange, and of this population, 344 investors were selected by simple random sampling and were analyzed using Cochran formula. The structural equation modeling and LISREL software were used to assess the relationships between variables. The results of goodness of fit indices such as RMSEA, GFI and AGFI represented the good fit of the model and the utility of results. The results indicated that the impact of the financial attitude and behavior on financial investment decisions was significantly positive. The investment decision also had a significantly positive effect on investment performance