Shubham Sharma’s research while affiliated with Himachal Pradesh University and other places

This study investigates the impact of risk tolerance on mutual fund investment behavior in Himachal Pradesh, India using information gathered from 450 respondents in the districts of Kangra, Una, and Hamirpur, the study uses regression analysis to look into the connection between mutual fund investments and risk tolerance. The results indicate that risk tolerance and mutual fund investing have a statistically significant and substantially favourable connection. With standard deviations indicating some variation in respondents’ risk preferences, descriptive statistics show a higher-than-average risk tolerance and investment activity. The results of the regression analysis indicate that variations in risk tolerance account for 70% of the variance in mutual fund investment behavior. The findings show that respondents who have higher risk tolerance are more inclined to invest in mutual funds, underscoring the importance of risk tolerance in financial decision-making. In order to promote wise mutual fund investing practices, financial advisors and policymaker can benefit greatly from the study’s observations, which emphasize the significance of comprehending behavioral trends in investing.

A subset of behavioural economics known as “behavioural finance” asserts that individuals are significantly less rational in their financial decision-making, such as investing, than traditional financial theory suggests. Investors interested in the influence of emotions and biases on stock prices can discover intriguing insights and analyses within behavioural finance. Numerous biases that can influence investors’ rational decision-making have been identified in finance. In 2002, Professor of Psychology Daniel Kahneman received the Nobel Prize in Economics for his contributions to behavioural finance. Professor Kahneman examined the biases and heuristics that may arise while selecting investments under conditions of uncertainty. Following the introduction of prospect theory in 1979, numerous studies investigating various biases and their influence on the decision-making of individual investors yielded noteworthy discoveries. This systematic literature review will determine if several behavioural biases, such as loss aversion, overconfidence, mental accounting, representativeness, regret aversion, and herding, influence the decision-making of individual investors during investment decisions.