2024, Vol. 7, Issue 1

author(s)
Pooja Dhingra and Rakesh Garg

abstract
Traditional finance theories assume that investors are rational decision-makers who always act in their best financial interest. However, behavioral finance challenges this notion, suggesting that investors are influenced by cognitive biases, emotions, and psychological factors. This study explores the role of behavioral finance in investment decision-making among Indian investors, highlighting key biases such as loss aversion, overconfidence, herd mentality, and mental accounting. The research uses both primary and secondary data to analyze how these biases affect investment choices and portfolio performance. The study also provides recommendations to help investors make more rational and informed investment decisions.