The Impact of Behavioral Finance on Stock Markets
Year: 2012
Type: article
Abstract: This article presents a new approach in the analysis of capital markets, namely behavioral finance. Behavioralfinance is the study of the influence of the psychological factors on financial markets evolution. Financial investors arepeople with a very varied number of deviations from rational behaviour, which is the reason why there is a variety ofeffects, which explain market anomalies. Classical finance assumes that investors are rational and they are focused toselect an efficient portfolio, which means including a combination of asset classes chosen in such a manner as toachieve the greatest possible returns over the long term, under the terms of a tolerable level of risk. Behavioral financeparadigm suggests that investment decision is influenced in a large proportion by psychological and emotional factors.
Author: Felicia Ramona
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W91883225