THE ROLE OF FINANCIAL LITERACY AND PSYCHOLOGICAL FACTORS IN INVESTMENT DECISION BY NON-PROFESSIONAL INDIVIDUAL INVESTORS

There is no world without risk and uncertainty whenever future is unknown. There are so many factors that create an influence on global financial market. Economic, social, political, Environmental, technological and irregular factors are most prominent for influencing the financial market. However, the impact of all factors is conveyed and leaded by a group of Investor. Eventually the impact of influence of all factors are driven by reaction and perception of investor. Behavioral finance is an emerging field that examines how psychological and cognitive factors influence individuals' economic decisions. It integrates insights from behavioral and cognitive psychology into the traditional domains of economics and finance. By recognizing the impact of human emotions, biases, and cognitive processes, behavioral finance provides a more comprehensive understanding of financial behaviors and decision-making, challenging traditional economic models that assume rationality and efficiency. This research explores the intricate relationship between information, psychological factors, and financial decision-making, shedding light on the pivotal role they play in shaping individuals' choices in the dynamic financial landscape. The study investigates how the availability and interpretation of information, coupled with psychological elements, influence decision-making processes in the realm of finance. Behavioral finance represents a multidisciplinary research approach that explores how psychology influences individual decision-making in the realm of finance and the subsequent effects on financial markets. In this field, behavioral models are constructed by integrating insights from psychology into traditional economic theories. Rather than adhering strictly to the assumptions of classical economics, these models take into account the complexities of human behavior, incorporating concepts from psychology.


DOI:

Article DOI:

DOI URL:


Download Full Paper:

Download