Investment Decisions, Herd Behaviour and Retail Investors
Madhavan Devadas1, T. Vijayakumar2
1Madhavan Devadas, School of Management, SRM Institute of Science and Technology, Chennai, India.
1Dt.T.Vijayakumar, School of Management, SRM Institute of Science and Technology, Chennai, India.
Manuscript received on 11 August 2019 | Revised Manuscript received on 17 August 2019 | Manuscript published on 30 August 2019 | PP: 3291-3294 | Volume-8 Issue-10, August 2019 | Retrieval Number: J12100881019/2019©BEIESP | DOI: 10.35940/ijitee.J1210.0881019
Open Access | Ethics and Policies | Cite | Mendeley | Indexing and Abstracting
© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Behavioral finance explains that cognitive biases influences investor decision making. Due to the influence of different behavioral biases investors do tend to make irrational decisions. Behavioral finance has highlighted the failure of traditional finance theories to account for human emotions when making investment decisions. While traditional finance theories disregard human element in decision-making, behavioral finance theories take into account the human phycology while explaining theories. Many studies have found and explained many biases that are exhibited by investors which lead to irrational investment decision making on their part. One among the many the biases herding can be considered among the most important behavior which leads to low quality investment decisions by investors. While compared to studies about herd behavior of institutional investors, the studies about individual retail investors in less. The motive behind this study is to clarify the role of demographic factors and psychological factors that influence herd behavior among individual investors. In this study the impact of demographics and psychological factors on herd behavior was studied. For this survey, primary data was collected using Judgment sampling technique and the results analyzed. Retail investors in Chennai exhibited herd behavior with regard to investment decisions. Eight factors were found to influence herd behavior.
Keywords: Behavioural Biases, Personal Values, Investment Decisions, Demographics
Scope of the Article: Behaviour of Structures