DefinePK

Abstract

This study examines the role of Adversity Quotient (AQ) in shaping investor decision-making during stressful financial market conditions. Behavioral finance literature has long documented the influence of psychological biases such as overconfidence, loss aversion, and herd behavior, but resilience-based constructs remain underexplored. Using a qualitative approach, this research investigates how individual investors in Pakistan respond to market adversity. Data was collected from 20 experienced investors through structured open-ended questionnaires and analyzed thematically following Braun and Clarke’s six-step framework. The findings reveal distinct behavioral differences between investors with high and low AQ. High AQ investors demonstrated emotional regulation, cognitive reframing, and adaptive strategies, while low AQ investors exhibited panic selling, reliance on rumors, and emotional fatigue. The study contributes to behavioral finance by integrating AQ as a resilience-based perspective and contextualizing its role in an emerging market setting. Practical implications are drawn for investor education, financial advisory practices, and policy interventions aimed at promoting market stability through psychological preparedness. Limitations and future research directions are outlined, including the need for larger quantitative studies and cross-cultural comparisons.