Overview
Behavioral insights into investment decisions reveal that psychological factors play a crucial role in how investors make choices. Cognitive biases, emotional influences, and market sentiment can lead to irrational behaviors that deviate from traditional financial theories. Understanding these eleme...
Key Terms
Example: Overconfidence bias leads investors to overestimate their knowledge.
Example: Selling stocks in a panic during market downturns.
Example: Bullish sentiment indicates optimism about market performance.
Example: Investors may perceive tech stocks as riskier than utility stocks.
Example: Investors buying stocks simply because others are doing so.
Example: Investors may hold losing stocks too long to avoid realizing a loss.
Related Topics
Cognitive Psychology in Finance
Explores how cognitive psychology principles apply to financial decision-making.
intermediateInvestment Strategies
Focuses on various strategies investors use to maximize returns and minimize risks.
intermediateMarket Analysis Techniques
Covers methods for analyzing market trends and making informed investment decisions.
advancedKey Concepts
Cognitive BiasesEmotional InvestingMarket SentimentRisk Perception