A STUDY ON BEHAVIORAL FINANCE AND ITS IMPACT ON INVESTMENT DECISION

In recent advancements in finance field have been betray the human behaviour and psychology is occupying a very important role in designing the investment decisions. The understanding has given rise to the fascinate field of behavioural finance, which helps in knowing about the cognitive biases, emotions and social influence impact on the decision-making process of the investor. Behavioural finance addresses the investors often deviate from the rational decision-making framework due to psychological biases and irrational behaviour. The irrational biases may lead to the suboptimal investment choices and outcomes. Common behavioural biases include, overconfidence, loss aversion, anchoring and mentality. Knowing the impact of behavioural finance on investment decision is very important for both individual investor and financial professionals. By taking help of both the factors, will give valuable information about the market and it helps about knowing the overall functioning of financial market. By scrutinizing about the behavioural finance, the researcher aims to uncovered the psychology and the behavioural factors influencing the investors while making decisions. This investigation provides a deep understanding of the mechanism of the market anomalies, irrational market behaviour and persistent deviation from the traditional theories. However, the study about the behavioural finance has a practical implication for financial advisor, investors, and policymakers.