Behavioural Finance

Masters
Essay
Business
Pages 6 (1506 words)
Download 0
Behavioural finance has become one of the disciplines of great interest to investment firms, wealth management professionals and those interested in the stock market performance. Behavioural Finance is commonly understood as the application of psychological aspects of investors to financial planning and investment decision making…

Introduction

Human behaviour and personal investment decision making can influence the trading results of a stock market and therefore, it is relevant to discuss the role of behavioural finance in the investment decisions at stock market. With this background, this paper attempts to discuss the influence of behavioural finance on the stock market performance in general and on the market bubbles and crashes in particular. The essay takes a descriptive approach wherein the present literature on these issues is mainly covered and an attempt is made to incorporate the relevant theories of behavioural finance.
Behavioural finance is one of the fast developing areas in the field of financial literature. This field of knowledge has developed a number of theories and theoretical models to explain the behavioural aspects of investment decision making. Most of the theories and models have been developed by borrowing insights from other branches such as psychology, sociology, and other behavioural sciences to analyze the behavioural aspects of investors and its influence on stock market performance. A good number of studies have been undertaken across the world to evolve behavioural theories and models so as to explain the association between the investor psychology and stock market performance. ...
Download paper
Not exactly what you need?

Related papers

Essay on Behavioural Finance
All the terms are part of the business strategy which is actually and play a decisive role in constructing marketing tactics (Stigler, 1957). The classical economists had always talked about the business tactics. Idea of growth and competitor business strategy is part of their explanation. Here are some who described economics and behavioral finance in all different perspective: Among major…
Business Essay on Behavioural Finance
Tapping telephone calls, monitoring computer and internet usage, and screening e-mails are some of the common employee surveillance practices. This paper will critically discuss the influence of workplace surveillance on managing people at work from the perspectives of both employers and employees. The paper will particularly focus on three relevant issues such as performance management, employee…
Behavioural Finance final
Different ways of reforms of financial crisis have been developed. Therefore, role of public policy will be discussed through some relevant economic theories developed by the eminent economists. These are Modern Momentary Theory, Moslers’s Law and Reverse Recardian Equivalence. These theories will be applied to identify the best possible ways in light of public sector to address financial…
Behavioural Economics: The New Era
Behavioural Economics: The New Era …
Behavioural Finance and the Efficiency of Capital Markets
All the literature on market efficiency defines an efficient market as one where prices reflect all available information and sellers cannot earn windfall profits in a sustained manner (Fama, 1970). Large profits can be earned only by having inside information that is not publicly known and trading based on such information, or through misinformation; both are illegal.…
Corporate Finance Essay
Where represents the return on security I, is the return on a risk-free investment such as the Treasury bill or government bond is the sensitivity of the return on security I, to movements in the market portfolio, and is the expected return on the market portfolio. (Bodie et al., 2005).…
Behavioural Finance
Human behaviour and personal investment decision making can influence the trading results of a stock market and therefore, it is relevant to discuss the role of behavioural finance in the investment decisions at stock market. With this background, this paper attempts to discuss the influence of behavioural finance on the stock market performance in general and on the market bubbles and crashes in…