A preliminary investigation of the behavioral barriers to investing

Abstract

For nearly two decades, the financial sector was mostly influenced by conventional financial ideas, such as modern portfolio theory and efficient market hypothesis. Behavioral finance is a developing area of study that examines the social and psychological factors that influence how individual and institutional investors make financial decisions. This study focuses on pervasive behavioral biases among investors and their impact on individual investors, institutional investors, the market, and regulators. Prior to making an investing decision in the stock market, investors should create a checklist of behavioral biases.