Mutual funds are the most popular way to invest on the capital market, even though
there are other options. Most of the time, investors use their analytical and math skills to decide
what to invest in. But many studies on behavioral finance have shown that investors tend to act
irrationally when making investment decisions, which is directly related to the way investors
act when they take risks. This study investigates the variables affecting Indonesian mutual fund
investors' risk- taking behavior and its relation to investment decision. There are 178 mutual
fund investors as respondents. The SPSS software version 22 is used in this study's multiple
linear regression tests. Results revealed that while herding and familiarity bias have a
considerable impact on investors' risk- taking behavior, heuristics and prospects have no
impact. This research enables investors who must construct and place themselves in a healthy
investing environment with the knowledge they need to make a sound investment decision with
valuable insight.