Introduction to Behavioral Finance

The area of behavioral finance contends that when making decisions under risk or uncertainty, investors are not acting rationally as implied by conventional financial theories and are instead influenced by psychological and social variables. Theorists contend that investors' psychological tendencies and biases influence market changes and returns. The categorization of behavioral finance aims to examine why investors are not entirely rational and self-controlled, why they make specific financial decisions, and how much these decisions may impact the markets. Behavioral finance today is quite effective at analyzing historical market data, but it cannot make predictions about how investors will behave in the future.

This course has been developed within the framework of behavioral finance to give knowledge on increasing investment profitability and investor psychology. The primary cause of investor losses in transactions, behavioral finance, will be thoroughly studied and introduced through its principles and aspects. Examples will be used to illustrate the impacts and trends of investor psychology in the financial markets. With this course, behavioral finance will be used to analyze investor behavior, and sensible investment decisions will be made.