Investor Behavior

Investor behavior refers to the way individuals make decisions about buying, holding, or selling investments. It is influenced not only by financial facts and analysis but also by emotions, biases, and psychological factors. For example, investors may panic sell during market downturns or hold onto losing stocks hoping for a rebound. Understanding this behavior helps explain market trends, as collective investor actions can drive asset prices up or down. Recognizing these patterns can lead to more informed, disciplined investment strategies, reducing the impact of emotional reactions and improving long-term financial outcomes.