Analysis of Changes in Risk Preferences and Decision-Making of Individual Investors from the Perspective of Behavioral Finance

This study explores the changes in risk preferences of individual investors in response to market fluctuations from the perspective of behavioral finance, and its impact on investment decisions. It was found that individual investors' risk preferences are influenced by various psychological factors including overconfidence, anchoring effect, and loss aversion tendencies. Additionally, market volatility and changes in economic environments significantly affect investors' willingness to accept risks. Through analyzing investment behaviors under different risk preferences, this paper reveals strategies for optimizing investment decision-making processes through education, emotional management, and policy-making. Moreover, the study points out that enhancing market information transparency and innovating investment tools can effectively guide individual investors towards more rational investment choices