Knowledge Tree
investment decision-making
Also known as: investing decisions
Facts (53)
Sources
Biases in Behavioral Finance - World Scholars Review worldscholarsreview.org Sep 15, 2024 18 facts
referenceSoraya, R., Risman, A., & Siswanti, I. (2023) published 'The Role of Risk Tolerance in Mediating the Effect of Overconfidence Bias, Representativeness Bias and Herding on Investment Decisions' in the Journal of Economics, Finance and Management Studies, 6(7).
claimBehavioral finance research identifies common behavioral factors that empirically lead to suboptimal investment decisions, with susceptibility to these biases varying based on an investor's expertise, skill, knowledge, and experience.
referenceSadeeq, U., and Butt, K. published 'Impact of Heuristic Driven Availability Bias on Investment Decision Making in Indian Stock Market: An Empirical Study' in the EPRA International Journal of Economic and Business Review in 2024.
claimArmansyah (2022) found a positive correlation between herding bias and investment decisions in the capital markets of Indonesia.
referenceKhan (2017) authored 'Impact of Availability Bias and Loss Aversion Bias on Investment Decision Making, Moderating Role of Risk Perception', which explores how availability bias and loss aversion affect investment decisions, with risk perception acting as a moderator.
referenceSukamulja, S. & Senoputri, A. (2017) published 'Regret Aversion Bias, Mental Accounting, Overconfidence, and Risk Perception in Investment Decision Making on Generation Y Workers in Yogyakarta' in the SSRG International Journal of Economics and Management Studies.
claimAïd et al. (2014) explored the impact of temporal discounting and precautionary biases on irreversible investment decisions.
referenceSalman, M., Khan, B., Khan, S., and Khan, R. published 'The Impact of Heuristic Availability Bias on Investment Decision-Making: Moderated Mediation Model' in Business Strategy and Development in 2020.
referenceHussain, Ahmad, and Ali (2013) published 'Hindsight Bias and Investment Decisions Making empirical evidence from an emerging financial market' in the International Journal of Research Studies in Management, which provides empirical evidence on the impact of hindsight bias on investment decisions in emerging markets.
claimSukamulja and Senoputri (2017) found that only overconfidence and risk perception significantly influence investment decision-making among Generation Y workers in Yogyakarta, while mental accounting did not have a significant influence.
claimFarhana and Jannatul (2023) found that regret aversion bias is a significant behavioral factor impacting investment decisions based on a pattern analysis of psychological biases.
referenceIqbal, Islam, List, and Nguyen (2021) authored the NBER Working Paper No. 28730, 'Myopic Loss Aversion and Investment Decisions: From the Laboratory to the Field', which investigates myopic loss aversion in both laboratory and field settings.
perspectiveBehavioral finance asserts that psychological factors, such as cognitive and emotional biases, significantly impact investment decisions and often lead to suboptimal choices.
claimBehavioral biases result in suboptimal investment decisions, according to Smith et al. (2022) and Jones & Evans (2023).
claimThe finding that regret aversion bias impacts investment decisions is consistent with studies in Indian stock markets (Mukherjee et al., 2019), Malaysian stock markets (Lim, 2012), and other global stock markets (Kengatharan, 2014).
referenceMassa and Simonov (2002) conducted research on the impact of behavioral biases on investment decisions.
referenceOwusu and Laryea (2023) examined the impact of anchoring bias on investment decision-making using evidence from Ghana.
referenceRahim, A., Khan, F., Mehmood, S., and Muhammad, L. published 'Post Covid-19 Impact of Availability Bias Effect on Investment Decisions of Pakistan Stock Exchange Registered Brokers Investors' in Psychology and Medicine in 2022.
Impact of Economic Indicators on Investment Decisions - BI-SAM bi-sam.com Sep 9, 2025 5 facts
claimThe application of economic indicators in investment decisions is subject to risks such as inappropriate portfolio adjustments triggered by misleading early readings, invalidation of investment rationale due to backward revisions, and the obscuring of underlying economic trends by seasonal adjustments.
claimInvestors often experience cognitive biases when interpreting economic indicators, which leads to suboptimal investment decisions and systematic errors in judgment.
claimThe use of soft signals in investment decision-making carries the risk of noise, specifically short-term volatility and emotional market reactions.
perspectiveEconomic indicators are indispensable tools for modern investors because they provide essential insights that inform strategic investment decisions across all market conditions.
claimEconomic data often arrives with significant delays and undergoes multiple revisions, which creates challenges for timely investment decisions and can lead to misleading initial impressions.
Understanding Behavioral Aspects of Financial Planning and Investing financialplanningassociation.org Mar 1, 2015 4 facts
claimContemporary financial experts largely reject the notions that markets are always efficient and that individuals are always rational when making investment decisions.
claimFinancial planners and advisers recognize that personality traits, demographic and socioeconomic factors, household characteristics, cognitive and emotional biases, and religion influence financial and investing decisions.
claimBehavioral finance assumes that the information structure and the characteristics of market participants systematically influence both individual investment decisions and market outcomes.
claimHuman beings are neither totally rational nor totally irrational when making investment and other financial decisions.
Influence of behavioral biases on investment decisions. The ... revistas.usc.gal 4 facts
claimBehavioral Finance asserts that cognitive and emotional factors influence investment decisions, contrasting with classical financial theories that assume individual rationality.
referenceThe article 'Influence of behavioral biases on investment decisions. The importance of financial education in times of crisis' cites various foundational works in behavioral finance, including research by Barber and Odean (2013) on individual investor behavior, Asch (1955) on social pressure, and Blasco and Ferreruela (2017) on why investors behave as they do.
referenceP. Slovic's 1972 paper 'Psychological study of human judgment: implications for investment decision making' discusses how human judgment processes affect investment choices.
claimIndividuals with higher levels of financial knowledge exhibit a lower presence of cognitive biases in their investment decisions.
The Importance of Macroeconomic Indicators - Learning Spotlight wtwealthmanagement.com Feb 11, 2026 4 facts
perspectiveWT Wealth Management advises that investors should establish a personal financial plan, including defining risk tolerance and investment objectives, before making any investment decisions.
perspectiveObserving macroeconomic trends serves to keep investment decisions aligned with the broader forces driving stock and bond markets, rather than predicting the future.
perspectiveWT Wealth Management recommends that individuals establish a personal financial plan before making investment decisions, which includes understanding personal risk tolerance, outlining investment objectives, and defining an investment time horizon.
perspectiveWT Wealth Management states that observing macro trends is about keeping investment decisions aligned with the broader forces that drive stock and bond markets, rather than predicting the future.
The Influence of Behavioral Biases on Investment Decisions jmsr-online.com Jul 8, 2025 2 facts
claimBehavioral finance challenges traditional finance theories by demonstrating that cognitive and emotional biases systematically influence investment decisions.
referenceKumar, S., & Goyal, N. (2015) authored 'Behavioural biases in investment decision making – A systematic literature review', published in Qualitative Research in Financial Markets, 7(1), 88–108.
Risk and Return - Explore Meaning and Key Differences bajajfinserv.in 1 fact
perspectiveInvestors should determine their financial objectives and risk tolerance while setting realistic return expectations to make optimal investment decisions.
Mind Over Money: Behavioral Economics and Financial Decision ... linkedin.com Dec 9, 2024 1 fact
referenceDaniel Crosby's book 'The Behavioral Investor' explores the psychological biases that impact investors and provides actionable insights to help individuals make better investment decisions.
The Impact of Global Economic Trends on Personal Investments onpointcu.com Apr 18, 2024 1 fact
claimMonitoring global economic trends is essential for individuals looking to make informed investment decisions, as these trends can significantly impact portfolio performance.
The Role of Behavioral Economics in Investment Decision-Making online.utpb.edu 1 fact
claimThe University of Texas Permian Basin offers online finance degree programs that cover investment decision-making.
Six financial literacy principles - RBC Wealth Management rbcwealthmanagement.com 1 fact
claimAn individual's stage of life significantly impacts their current and future financial picture and the financial and investment decisions they make.
The Impact of Cognitive Biases on Professionals' Decision-Making frontiersin.org 1 fact
claimOverconfidence and the disposition effect are two cognitive biases frequently studied in investment decision-making, according to a systematic review by Kumar and Goyal (2015).
5 common behavioural investing biases - ATB Financial atb.com 1 fact
claimOverconfidence is a behavioral bias where individuals believe they are more knowledgeable or better at investing than they actually are, which impairs their ability to make sound investment decisions based on objective facts.
The Psychology Behind Financial Choices: The Role of Cognitive ... tutoring.hsa.net 1 fact
claimLoss aversion can lead to poor investment decisions, such as holding onto stocks that are losing value or avoiding lucrative investments due to the fear of potential losses.
An Exploratory Study of the Wealthy's Investment Beliefs ... financialplanningassociation.org Mar 1, 2025 1 fact
claimBoth high-net-worth and affluent cohorts hold similar views regarding the importance of incorporating ESG (Environmental, Social, and Governance) factors into investment decisions.
The Influence of Cognitive Biases on Investment Decisions legfin.in Aug 21, 2024 1 fact
referenceThe article 'Behavioral Economics: The Influence of Cognitive Biases on Investment Decisions' explores the intersection of behavioral economics and finance, specifically focusing on how cognitive biases influence investment decisions.
5 Behavioral Biases That Can Impact Your Investing Decisions online.mason.wm.edu Feb 5, 2025 1 fact
claimOverconfidence bias occurs when investors overestimate their own abilities, which can lead to poor investment decisions.
Systemic or “Macro” Factors that Affect Financial Thinking nicoletcollege.pressbooks.pub 1 fact
claimPrice changes influence consumption decisions, while changes in currency value influence investing decisions.
Key Macroeconomic Factors and their Impact on the Economy imarticus.org Oct 13, 2024 1 fact
claimUnderstanding macroeconomics helps investment banking professionals assess risks and make informed investment decisions.
The Relationship Between Risk and Return in Different Asset Classes bi-sam.com Mar 18, 2025 1 fact
perspectiveUnderstanding the risk-return spectrum of different asset classes is essential for making informed investment decisions that align with an investor's goals.
5 Biases Affecting Your Investment Decisions | Global Credit Union globalcu.org 1 fact
claimBehavioral finance is defined as the study of psychological factors that affect the investment decisions individuals make.
1.3: Systemic or "Macro" Factors That Affect Financial Thinking biz.libretexts.org Aug 23, 2025 1 fact
claimChanges in currency value impact investment decisions, while price changes affect consumption decisions.