Investment Psychology

Investment psychology refers to how emotions, biases, and mental attitudes influence investors’ decisions and behaviors in the markets. It recognizes that factors like fear, greed, overconfidence, or herd mentality can lead to impulsive actions, such as panic selling or reckless buying, often deviating from rational analysis. Understanding investment psychology helps investors manage emotional reactions, avoid common traps, and make more disciplined, informed choices. Ultimately, it emphasizes that successful investing isn’t just about the numbers, but also about awareness of mental and emotional influences that affect market behavior.