The study of psychological and social aspects that affect financial decisions and markets is known as behavioural finance.
In order to comprehend why people make particular financial decisions and how those decisions affect financial markets, it blends elements of psychology, economics, and sociology.
The fact that humans are not always logical and objective when making financial decisions is one of the main lessons of behavioural finance. Instead, a number of psychological and social elements, including feelings, biases, and heuristics, might have an impact on our decisions (rules of thumb). For instance, people could be more inclined to sell a stock when its value has decreased (a phenomena known as the "disposition effect") or to keep a stock for an excessively long time due to emotional reasons.
and markets is known as behavioural finance. In order to comprehend why people make particular financial decisions and how those decisions affect financial markets, it blends elements of psychology, economics, and sociology.
The fact that humans are not always logical and objective when making financial decisions is one of the main lessons of behavioural finance. Instead, a number of psychological and social elements, including feelings, biases, and heuristics, might have an impact on our decisions (rules of thumb). For instance, people could be more inclined to sell a stock when its value has decreased (a phenomena known as the "disposition effect") or to keep a stock for an excessively long time due to emotional reasons.