Behavioral Finance and Investor Psychology - An Empirical Study

Abstract

Behavioral finance is a new subject in the field of finance and is very popular in stock markets across the world for investment decisions. However, in India, this subject is at very nascent stage in the stock market. The volume of research in the field of behavioral finance has grown over the recent years. Behavioral finance merges the concepts of finance, economics and psychology to understand the human behavior in the financial markets in order to form winning investment strategies. Behavioral finance explains how emotions and cognitive errors influence investors and the decision-making process. In this paper, the researchers had made an attempt to study the investor psychology while investing money in stock market. The researchers also explored the relationship between the success rate of beating the market and other related variables namely fundamental and technical analysis, opinion of broker, media etc.

Keywords: Behavioral Finance, Investor Psychology, Herd Mentality, Chi square and ANOVA

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