Written and accurate as at: 7 Jul 2015
Behavioural finance is the study of the psychological biases that impact decision making.
When it comes to financial markets, the impact of psychology can be clearly seen in investor behaviour, such as herding.
This can lead to bubbles and crashes and fear of regret, where investors avoid selling a poorly performing investment because they do not want to admit to having made a bad decision to begin with.
This video explores some common good and bad investor behaviour traits.