Role of Emotions on Individual Investors in Investment Decisions (A Case of Indian Capital Market of Bareilly City)

Dr. Ashish Kumar Saxena; Dr. Rakesh Kumar Yadav

doi:https://doi.org/10.51976/gla.prastuti.v6i2.621704

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Role of Emotions on Individual Investors in Investment Decisions (A Case of Indian Capital Market of Bareilly City)

Ashish Kumar Saxena, Rakesh Kumar Yadav

Vol 6 , Issue 2 , July - December 2017 | Pages: 24-38 | Research Paper

https://doi.org/10.51976/gla.prastuti.v6i2.621704

Published Online: January 10, 2018

Author Details ( * ) denotes Corresponding author

1. * Ashish Kumar Saxena, Assistant Professor, Dept. of Commerce, SBM, IFTM University, Moradabad, Uttar Pradesh, India (ashish.saxena@iftmuniversity.ac.in)

2. Rakesh Kumar Yadav, Associate Professor & Head, Dept. of Management, SBM, IFTM University, Moradabad, Uttar Pradesh, India (rkyadav@iftmuniversity.ac.in)

Modern finance theorists have assumed that stock market investors always behave in a "rational" manner. The rational behavior assumes that decision-making by investors involves collection of relevant information from corporate balance-sheets and other sources, and their objective appraisal using time-tested investment tools and models. Behavioral finance examines human actions which affect investment performance at virtually every level for individuals and professional institutional investors. This study has given an idea about the impact of various psychological and emotional factors in the investment decision of Indian middle class retail individual investors.

The findings of the study reveal that the investors prefer hot stocks for investment purpose and representativeness is one of the important factors in their investment decision making, also found investors are not very confident about their portfolio performance. Anchoring and representativeness past experiences, etc. Thus it can be concluded that emotions play a key role in investment decisions so various emotional variables related to heuristic, market and risk tolerance should be considered for investment decision and theory of rational investor cannot be implemented in today’s time.

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