Main Article Content
Abstract
There are mainly two type of analysis in financial market - Traditional Finance and Behavioural Finance. The Traditional Theory believes that investors are rational, knowledgeable and they are not diverted by their feelings or emotions, they act quickly in financial markets and they have perfect information. On the other hand, Behavioral finance is a new concept that helps in studying the behavior of investors within the financial market and the factors that manipulate their psychological behavior and the resulting decisions that are carried out by an individual investor, while carrying out their purchase and sale of stocks within the market. Behavioural Finance give importance to the psychological aspects which helps in understanding whether investor is making rational or irrational decision. In this paper an attempt has been made to highlight shortcomings of the traditional finance, various behavioural biases and significance of behavioural financial in contemporary world therefore, the decision-making regarding finance.