<![CDATA[This study examines the influence of herding behavior and investment literacy on investment decisions among beginner Generation Z investors in North Sumatra, Indonesia, with investment experience and risk tolerance tested as mediating variables. Using a quantitative, quantitative associative with a cross-sectional survey and analyzed using structural equation modeling. For direct effects, results show that herding behavior has no significant direct effect on investment decisions, but it has a significant negative effect on investment experience and a significant positive effect on risk tolerance; investment literacy, in contrast, has significant positive direct effects on investment experience, risk tolerance, and investment decisions, confirming its role as the strongest overall predictor. For indirect effects, risk tolerance significantly mediates the influence of both herding behavior and investment literacy on investment decisions, whereas investment experience does not significantly mediate either relationship. Overall, the model explains 87.4 percent of the variance in investment decisions. Theoretically, the study integrates social learning, prospect theory, and experiential learning perspectives to explain how beginner investors process social information and calibrate risk. Practically, the findings suggest that regulators and digital investment platforms should strengthen risk profiling and behavioral nudge features for Generation Z investors, who increasingly dominate market participation in North Sumatra. These findings highlight risk tolerance as the key psychological channel linking behavioral and cognitive factors to investment behavior, underscoring the importance of financial literacy programs and behavioral nudges for improving investment decision quality among young retail investors.]]>
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