Study Of Behavioural Finance on Investment Decision of Mutual Fund

Abstract

Behavioural finance is a very important subject that explores the influence of psychology on financial decisions. The purpose of this research is to examine the effect of investor behavior on mutual fund investments.

Traditional theories of finance presuppose the rational behavior of investors; however, under practical conditions, the emotional aspect, such as fear, greed, or over-confidence, plays a significant role in decision making. In this regard, this research highlights behavioral aspects such as herd mentality, loss aversion, anchoring, and mental accounting.

It uses primary sources in the form of questionnaire to explore the relationship between behavioral factors and investment decisions. The findings suggest that psychology is an important factor that affects investor behavior.