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Abstract

Behavioural finance is the study of the combination of psychological, social and financial aspects which influences an investor in making decisions related to investment. This paper aims to study the various behavioural factors that affect the decision of an individual while making investments. It is must for any individual investor to consider all the factors which affects his/her decisions, even though he makes fundamental analysis of the market his/her decisions vary due to investment behavioural aspects like over confidence, herd-behaviour, loss aversion, representative bias, anchoring and regret theory. Behaviour of an investor is not always rational and the market is sometimes not consistently which leads to the irrational decisions taken by them. The paper is based on questionnaire survey which concentrates on the investors in Bengaluru of the various above factors of general investors in decision making. This paper discusses briefly the various reasons which affect an investor’s behaviour also focuses on the different biases an investor tends to act upon when investing in various sectors.

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