A Study On Investors’ Attitude Towards Pre-Investment Decision Making

Abstract

According to economic theorists, investors think and behave “rationally” when buying and selling stocks. Generally investors are presumed to use all available information to form “rational expectations” in investment decision making. In reality, individual investors do not think and behave rationally. Individual investor behaviour is motivated by a variety of psychological heuristics and biases. Indian stock market is considered to be highly volatile, sensitive and reactive to unanticipated shocks and news. At the same time, Indian stock market Survey findings reveal that investors use both fundamental as well as technical analysis while investing in Indian stock market. Most of the respondents strongly agree that various company fundamentals. It is believed that trading behaviour of individual investors rarely influences the stock prices. The paper aims in analyzing the determinants of the individual investor behaviour of Indian stock market and factors affecting their pre-investment decisions.