Behavioral Biases of Stock Investment Decisions of Nepalese Investors

Abstract

The research aimed at examining behavioral biases of stock investment decision of Nepalese investors.Behavioural finance studied the irrational aspect of human as an investor in their investment decision process. This branch of discipline indicated that cognitive biases prevent investors from realizing a complete sense of rationality at the time of investment decision-making. An act of rationality linked with a magnitude of uncertainty and risk, which is associated with every investment decision option. Various behavioural biases influence these risk and uncertainty. These behavioural biases focus on investor's behaviour and their investment decision-making process. The present study was focussed mainly on formulation and analysis off our behavioural bias, namely, anchoring, overconfidence, disposition effect, and herding behaviour.The study has been conducted only among the investors of selected business sectors inside the Kathmandu Valley within a limited time period. The study used a limited number of analysis tools to study the impact of behavioral biases of the individual investors on their decisions.The study findings should provide important Behavioral Biases of Stock Investment Decision of Nepalese Investors.Moreover, the study can also further be elaborated to investigate the impact on a group or corporate investment decision making as well.Future studies may be elaborated by analysing other behavioural biases that too have a substantial impact on individual investment decision making in their unique way. The study can also further be elaborated to investigate the impact on a group or corporate investment decision making as well. Key words:Behavioral biases,business sustainability, Investment Decision