Creating Investment Strategies Using Behavioural Finance

Lakshya Kapoor; Dr. Sarita Rana

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| Published: November 28, 2022

Creating Investment Strategies Using Behavioural Finance

Lakshya Kapoor

Student, Bachelor of Commerce (Honors), Maharaja Surajmal Institute, GGSIPU, Delhi Google Scholar More about the auther

, Dr. Sarita Rana

Assistant Professor, Department of Commerce, Maharaja Surajmal Institute, GGSIPU, Delhi Google Scholar More about the auther

DIP: 18.01.064.20221004

DOI: 10.25215/1004.064

ABSTRACT

This paper is concerned with discussing some general principals of behavioral finance, including- financial cognitive dissonance, the theory of regret, overconfidence, and prospect theory. These principals are contrasted with those of traditional finance and the assumptions undertaken in traditional finance. This paper is intended to help those who invest (or trade) in stocks, derivatives, government bonds, and mutual funds by providing some important strategies to avoid psychological mistakes and errors in their investments. Individual investment preferences and the different factors of behavioral finance which influence investment decisions are also discussed here.

Keywords

Behavioural Finance, Traditional Finance Theories, Behavioural Biases, Investment Decision Making, Investor Biases

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This is an Open Access Research distributed under the terms of the Creative Commons Attribution License (www.creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any Medium, provided the original work is properly cited.

How to cite this article: Kapoor, L.& Rana, S. (2022). Creating Investment Strategies Using Behavioural Finance. International Journal of Indian Psychology, 10(4), 665-675. DIP:18.01.064.20221004, DOI:10.25215/1004.064