Psycological Biases of Investors
DOI:
https://doi.org/10.61190/fsr.v11i2.4726Keywords:
Behavioral finance, Investor PsychologyAbstract
We review the field of behavioral finance as it relates to investors. Specifically, we examine common investment mistakes caused by an investors' cognitive and emotional weaknesses and group these mistakes into two categories: how investors think and how investors feel. Although most recent research deals with these psycological influences in investor decision-making, we also discuss social factors that affect financial decisions. We suggest five steps that investors can take to help overcome common mistakes. FInally, we present some thoughts on further behavioral research involving investors.
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