PERCEPTION OF INDIVIDUAL INVESTORS ON INVESTMENT BASED ON BEHAVIOURAL FINANCE

Making an investment involves committing scarce financial resources, and the final outcome is inherently uncertain.Returns may be positive or negative, and every decision-whether wise or flawed-has consequences for investment performance.Even well-informed decisions can result in losses when unexpected events occur.Conversely, some losses arise from avoidable mistakes.Therefore, it is essential to recognize the situations and psychological factors that contribute to poor decisions so that their adverse effects can be minimized.Behavioral finance focuses on understanding how cognitive biases, emotions, and reasoning errors influence investor behavior and market outcomes.It explains why investors sometimes deviate from rational decision-making and how these deviations affect security prices and overall market efficiency.