The present study analyzes challenges in the investment decision making. The study used primary data collected from 384 potential investors in Karnataka. The principal component analysis is used for the factor analysis. The study found that timely information on investment, delay in payment of returns and claim settlement, safety of principal, low liquidity, and inadequate disclosure have been identified under the first component. These five challenges need to be simultaneously addressed and need to be solved with the highest priority. Lack of knowledge, selection of company, and uncertainty of returns are the factors identified under the second component. These three challenges also need to be simultaneously considered for investment decisions. Unclear terms and conditions and selection of scheme are the factors identified under the third component with the third highest influence. Accordingly, the factor analysis succeeded in identifying the joint factors as a group of challenges under the three components in order to better understand challenges in investment decision making.