An Empirical Review Of Behavioral Biases In Investment Decisions

Abstract

The present study is to focus on the insights of investment behavior of investors in general. Investment analysis was performing from very long periods, but most of times analysis was proven wrong and investor couldn’t make fruits of their investment. The main reason for the failure of analysis is they focus on the different aspects of Economies and predict what happens in future but they neglect the capacity and failure of human brain while analyzing and processing the data. Here this research will focus on the different issues corresponding to the behavioral aspects which plays crucial role while investing the funds. Cognitive behavior of investors will create disadvantageous result of an investment. These behavioral issues are called Behavioral Biases. These biases influence an investor unknowingly to deviate from the actual analysis for choosing investment option. This research made to find such aspects to influence the investor decisions. The behavioral biases create chaos to the investors and guiding others to fear for Markets, hence market flies down trend. The Behavioral Biases includes Herding, Home bias, Over Confidence, Anchoring, Gambler Fallacy, Loss Aversion, Regrets and Mental Accounting and so on.