Impact of Behavioural Finance on Investment Decision Making of Individual Urban Investors with Special Reference to Jaipur District of Rajasthan

Abstract

The severe volatility of financial markets throughout the world economies in 2008 as newlineGlobal Financial Crisis, observed individual s emotions, behaviour and sentiments as the newlinekey causes for market inefficiencies. It becomes essential to study about these newlineinefficiencies, causes of these efficiencies such as role of investor s emotions and other newlinepsychological factors to be safe from these types of crises. Behavioural finance is an newlineemerging concept which is a multidisciplinary approach of research as it is combination newlineof psychology and finance. In this concept, the impact of psychological factors on newlineindividual s behaviour and ultimately its effect on investment decisions such as selection newlineand trading of assets is studied. newlineHuman beings firstly consume the hard-earned money for their survival and then newlinethey invest the money for earning the returns. They select investment option among all newlinethe available financial investment instruments. They have to select the financial newlineinvestment option as per their need and risk-taking capacity. But, availability and newlineexposure to numerous information in the prevailing market situations, the investors newlinebecome confused and also the analysis of all the available information is time taking newlineactivity and requires investment skills to analysis this information. newlineThe investors need to select an investment option that can fulfil their objective of newlineincrease in wealth according to their risk-taking capacity. This selection of investment newlineoption is affected by a number of factors that can be sociological, demographical, newlinepolitical, ecological, behavioural, economical etc. Traditionally, only metro cities have newlinebeen major contributor to the equity market. Previous researches shown the development newlineand growth of an economy is distinctly affected by the growth of security markets. Indian newlinefinancial market started blooming in 90 s as investors started in equity market along with newlineconventional non-risky investment options.