Investor behavior analysis is a study made on the demographics and psychographics of the investor considering the parameters like age, gender and income groups and also some psychological parameters that will attract the investor towards that particular investment. This analysis describes why an investor will opt a particular investment and the motive behind the investment and other objectives of investment. Investment markets are becoming more risky and each and every passing day makes investors behave differently upon different market dynamics. The basic methods of market analysis (Fundamental, Technical and Quantitative) though are playing an important role in investment decisions, the behavior of the investors has become more important and hence the study “Behavioral Finance” emerging and becoming the topic of various researches and studies. In extension to the same, this study reviews the literature on one of the most meaningful concepts in behavioural finance, the decision factors which are influenced by market movements and examines the perceptions, preferences and various investment strategies adopted by investors in the Indian stock market on the basis of a survey of 50 respondents based in across the country .The study analyses the rationality of the investors across the country during different market expectations, dividend and bonus announcements, the impact of age, income levels and other market related information on investment decisions of investors from across the country.
Keyword : investor behavior, financial decision making, behavioral finance, cognitive modeling, agent based artificial financial markets.
There are several parameters that an investor will think before investing like return, flexibility , etc but the markets will face a question mark in knowing the pulse of an investor. So a study must be made on the demographics and psychographics of the investor such that the market can know the pulse of an investor and can act upon it. These are the results of such a survey that was made on the investor. Investor behavior analysis deals with analyzing the behavior of an investor based on his demographic and psychographic factors like age, gender and income groups. This states what would be a preferred portfolio of an investor at anage. This will be helpful to the stock brokers and portfolio managers so that they can offer better portfolios to their investors. This analysis will show the mentality of an investor and his preferences clearly and concisely.
Business investment behavior is one of the areas of modern economic research that is being studied most intensively; empirical studies are accumulating rapidly, and at the same time important developments.
Based on a survey of behavioral finance , this report resents a descriptive model of individual investor behavior in which investment decisions are seen as an iterative process of interactions between the investor and the investment environment. This investment process is influenced by a number of interdependent variables and driven by dual mental systems, the interplay of which contributes to boundedly rational behavior where investors use various heuristics and may exhibit behavioral biases. In the modeling tradition of cognitive science and intelligent systems, the investor is seen as a learning, adapting, and evolving entity that perceives the environment, processes information, acts upon it, and updates his or her internal states. This conceptual model can be used to build stylized representations of (classes of) individual investors, and further studied using the paradigm of agent-based artificial financial markets. By allowing us to implement individual investor behavior, to choose various market mechanisms, and to analyze the obtained asset prices, agent-based models can bridge the gap between the micro level of individual investor behavior and the macro level of aggregate market phenomena. It...
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