An Empirical Study on Emotional Bias Affecting Investment Decisions of Investors

Investor's investment decision is a complex phenomenon. Their financial decisions get influenced by cognitive&emotional biases. Investors make use of rules framed by them for investment decisions in complex and uncertain market, but in reality investors are not rational. They are frequently influenced by emotions while taking investment decision. Emotions can get in the way of making prudent financial decisions. It is human nature that they react differently when they are in a different state of emotions. The primary objective is to study the various emotional biases that influence the investment decisions of the investors. Here the various literature were gathered and studied and was based on the secondary data. It was concluded that the various cognitive and emotional biases have an impact on the investors while making investment decisions.