An Analytical Study of Investor’s Psychological Biases and its Impact on Mutual Funds Investment Decisions
Author : Yogita Yadav and Dr. Vinitendra Pratap Singh
Abstract :
This study is aim to determine the impact of Loss Aversion psychological bias and Optimistic Bias on mutual funds investment decisions of individual investors. This study includes the three major derivatives of mutual fund that is Systematic Investment Plans, Open ended mutual funds and close ended mutual funds for study. The study having an assumption to find out the significant or insignificant relationship between psychological biases and mutual funds investment decisions. Investor’s behavior sometime unknowingly and unintentionally influenced with some psychological biases. Various researchers are studied the investment behavior of individual investors and the influence of psychological factors are identified. Generally investors are not aware about the impact of psychological biases in their decision making process So, this study is help to understand the irrational investment behavior of individual Investor while taking investment decisions in future in order to avoid risk and uncertainties for their choices. The uniqueness of the study is that it considered the impact on the basis of multiple derivatives which are not included in previous researches. The study having a significant effect on not only individual investors but it is also helpful to other stock market participants for making better decision choices for their investments.
Keywords :
Psychological biases, mutual funds, behavioral finance, investment decisions
