narrative finance

Narrative finance refers to how stories and perceptions influence financial markets and investor behavior. Instead of only relying on numbers and data, people’s beliefs, emotions, and shared stories about companies, economies, or trends shape their investment decisions. These narratives can drive market movements, sometimes amplifying gains or losses beyond what fundamentals would suggest. Understanding narrative finance helps explain phenomena like market bubbles or crashes, as collective beliefs and storytelling can strongly impact financial outcomes even when underlying data remains unchanged.