Behavioral biases very importantly influence individual investment decisions often leading to suboptimal financial outcomes. This article focus on cardinal paramount behavioural biases along with line of investing decisions among investors in Bangalore. Utilizing primary datacollected through a structured questionnaire administered to 300 active stock market investors the research employs both correlation and regression analyses to examine the relationships between these biases and investment effectiveness indicators such as portfolio returns trading frequency and risk-taking behavior Barber and Odean (Barber and Odean in Quarterly Journal of Economics 116:261–292, 2001). The findings reveal that overconfidence and herding behaviors are positively correlated with increased trading frequency which in turn negatively affects portfolio effectiveness due to higher transaction costs and suboptimal trade timing. On the other hand regression indicate that these biases collectively explain a significant portion of the variance in investment decisions underscoring their difficult role in shaping investor behavior in the Bangalore. The researchadds to the existing literature by providing empirical evidence from the Indian metropolitan context highlighting the need for investor education programs aimed at mitigating the adverse effects of behavioral biases. Furthermore the search offers pragmatic recommendations for fiscal advisors and policymakers to further coherent investing behaviors among person investors

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The Impact of Behavioral Biases on Stock Investment Decisions: Evidence from Bangalore, India

  • Deepak Kumar,
  • H. V. Vinay,
  • S. Kiran,
  • H. C. Channakeshava,
  • C. H. Raja Kamal

摘要

Behavioral biases very importantly influence individual investment decisions often leading to suboptimal financial outcomes. This article focus on cardinal paramount behavioural biases along with line of investing decisions among investors in Bangalore. Utilizing primary datacollected through a structured questionnaire administered to 300 active stock market investors the research employs both correlation and regression analyses to examine the relationships between these biases and investment effectiveness indicators such as portfolio returns trading frequency and risk-taking behavior Barber and Odean (Barber and Odean in Quarterly Journal of Economics 116:261–292, 2001). The findings reveal that overconfidence and herding behaviors are positively correlated with increased trading frequency which in turn negatively affects portfolio effectiveness due to higher transaction costs and suboptimal trade timing. On the other hand regression indicate that these biases collectively explain a significant portion of the variance in investment decisions underscoring their difficult role in shaping investor behavior in the Bangalore. The researchadds to the existing literature by providing empirical evidence from the Indian metropolitan context highlighting the need for investor education programs aimed at mitigating the adverse effects of behavioral biases. Furthermore the search offers pragmatic recommendations for fiscal advisors and policymakers to further coherent investing behaviors among person investors