Behavioral Finance and Its Impact on Investor Decision-making
Year: 2025
Type: article
Abstract: Investor decision-making is far from a mechanical process; rather, it emerges from a complex mix of emotions, personal knowledge, and psychological biases. This study examines the real-world behavior of individual investors, drawing on data from 46 participants to uncover how they approach risk, process losses, and respond to external influences. The findings suggest that most investors display moderate risk tolerance—not overly aggressive, yet not entirely risk-averse. Emotional reactions to losses are significant, often shaping subsequent decisions. Additionally, there is a notable tendency to follow the crowd or rely on expert advice, highlighting the pervasive influence of social and external factors. Altogether, these patterns underscore the importance of financial education and reinforce the relevance of behavioral finance in understanding investor behavior.
Author: Singh, Shalu
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6930932458
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