THE IMPACT OF BEHAVIORAL FINANCE ON STOCK MARKETS

THE IMPACT OF BEHAVIORAL FINANCE ON STOCK MARKETS

Blog Article

This article presents a new approach koip share price in the analysis of capital markets, namely behavioral finance.Behavioralfinance is the study of the influence of the psychological factors on financial markets evolution.Financial investors arepeople with a very varied number of deviations from rational behaviour, which is the reason why there is a variety ofeffects, which explain market anomalies.

Classical finance assumes that investors are rational and they are focused toselect an efficient portfolio, which means including a combination of asset classes chosen in such a manner as toachieve the greatest possible returns over the long term, under the terms of a tolerable level of risk.Behavioral financeparadigm suggests that investment decision is influenced in a click here large proportion by psychological and emotional factors.