Behavioural Finance And Stock Market Performance - A Comprehensive Analysis
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Abstract
Important field of behavioral finance helps one to understand the psychological factors influencing investor behavior and their consequences on stock market performance. This work presents a comprehensive analysis of how cognitive biases, heuristics, and emotional responses vary from the traditional Efficient Market Hypothesis (EMH), therefore impacting market outcomes. This article uses a mixed-method approach combining qualitative and quantitative data to examine the correlation between investor psychology and market volatility. Important findings reveal that behavioral aspects significantly affect inefficiencies and market anomalies. The results underline the significance of adding behavioral insights into financial models to enhance market trend prediction. Apart from closing the gap between traditional finance and behavioral economics, this research has tangible ramifications for lawmakers, financial advisors, and investors to enhance investment strategies and market stability.