BEHAVIORAL FINANCE: UNDERSTANDING INVESTOR PSYCHOLOGY IN VOLATILE MARKETS
DOI:
https://doi.org/10.29121/shodhkosh.v3.i2.2022.4152Keywords:
Behavioral Finance, Investor Psychology, Volatile Markets, Herd Behavior, Loss Aversion, Overconfidence, Financial Decision-Making, Market Anomalies, Cognitive Biases, Emotional InvestingAbstract [English]
Behavioral finance examines the psychological factors and biases that influence investor behavior, particularly in volatile market conditions. Unlike traditional finance, which assumes rational decision-making, behavioral finance identifies emotional, cognitive, and social influences that drive market anomalies. This study explores key concepts such as herd behavior, overconfidence, loss aversion, and anchoring, providing insights into how these factors impact investment decisions. Using data from market trends, investor surveys, and financial analytics, the research evaluates strategies to mitigate irrational behavior and improve investment outcomes. The findings aim to equip investors and policymakers with tools to address psychological barriers and promote more stable financial markets.
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