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A Study of Behavioural Factors Affecting Individual Investment Decisions

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A Study of Behavioural Factors Affecting Individual Investment Decisions

Pawankumar S Hallale | Manjiri Gadekar

Pawankumar S Hallale | Manjiri Gadekar "A Study of Behavioural Factors Affecting Individual Investment Decisions" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-6, October 2019, pp.298-311, URL: https://www.ijtsrd.com/papers/ijtsrd28100.pdf

Although finance has been studied for thousands of years, behavioral finance which considers the human behaviour in finance is a pretty new area. Behavioral finance theories, which might be based totally at the psychology, try to apprehend how feelings and cognitive mistakes impact man or woman traders’ behaviour (buyers referred to on this look at are referred to person traders).The primary goal of this have a look at is exploring the behavioral factors influencing person buyers’ selections on the NSE & BSE Stock Exchange. Furthermore, the members of the family among these elements and funding overall performance also are tested. The have a look at begins with the present theories in behavioral finance, based totally on which, hypotheses are proposed. Then, those hypotheses are examined via the questionnaires dispensed to individual buyers on the Broking Firms, college students and professionals. The data collected from the Stock Broking firms, Students, Professionals through structured questionnaire were examined and data collected were analyzed using Cronbach's Alpha Reliability Test, based totally on which, hypotheses are proposed. The result indicates that there are 5 behavioral elements affecting the funding selections of person investors at the NSE & BSE Stock Exchange: Herding, Market, Prospect, Overconfidence-gamble’s fallacy, and Anchoring-ability bias. Most of these elements have mild impacts whereas Market element has high affect. This test also tries to discover the correlation among these behavioral factors and investment overall performance. Among the behavioral factors referred to above, best 3 elements are located to influence the Investment Performance: Herding (inclusive of shopping for and promoting; choice of trading shares; extent of buying and selling stocks; velocity of herding), Prospect (such as loss aversion, remorse aversion, and mental accounting), and Heuristic (inclusive of overconfidence and gamble’s fallacy). The heuristic behaviors are determined to have the highest advantageous impact at the investment overall performance while the herding behaviors are stated to persuade undoubtedly the investment overall performance on the lower degree. In assessment, the possibility behaviors provide the negative impact on the funding overall performance.

Stock Market, Stock Exchange, Behavioral factors affecting investors’ decision, Investment Performance, Market Awareness

Volume-3 | Issue-6, October 2019
IJTSRD | www.ijtsrd.com | E-ISSN 2456-6470
Copyright © 2019 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by/4.0)

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