investing psychology

Investing psychology is the study of how human emotions and mental biases influence financial decisions. It explains why investors might panic and sell during market dips or become overly optimistic during peaks, often reacting more to feelings than facts. Recognizing these psychological tendencies helps investors stay disciplined, avoid impulsive actions, and make better long-term choices. Overall, understanding investing psychology promotes more rational, measured approaches to managing money, reducing costly mistakes driven by fear, greed, or misinformation.