Study of Herd Behaviour in Financial Markets: An Examination of Investor Sentiments

Abstract

Behaviours in financial markets refer to the phenomenon in which investors chase the crowd and make investment decisions based on the actions of others rather than on their own analysis. This study uses a combination of quantitative and qualitative methods to consider the role of behavioural attitude on investors. It analyses a set of data on stock market trading and responses to surveys from individual investors to support the main motivations and identify the laws of conduct.

The paper highlights how investor moods such as fear, greed, and social influence play an important role in their investment decisions. It is also important to note that human sentiments impact more on the position of investments during periods of uncertainty and volatility in the market.

This study is important for politicians and market regulators who are trying to contribute to understanding the psychological and social factors that stimulate investor behaviour and promote more informed and rational investment decisions.

It is an attempt made to understand & analyse the relationship existing between investment positions & herd behaviour. The paper is based on primary data conducted through a structured questionnaire & secondary information collected through published articles, research papers from journals & news-papers.