Paper Contents
Abstract
This study makes it clear that financial decisions are not made only with numbers. They are also shaped by psychology, emotions, and culture. The abstract introduces the key areas of the paper like herding behaviour, demographics, and ESG factors. It also highlights why behavioural finance is very important for students and future investors to understand. The goal is to make students realise that behind every chart and number, there are human decisions influenced by fear, confidence, and ethical choices.Investment decisions are rarely the outcome of purely rational analysis. Traditional financial theories assume that investors carefully calculate risks and returns before acting. In reality, markets often display patterns that are inconsistent with rationality, such as bubbles, crashes, and irrational exuberance. This paper explores the influence of behavioural finance on investment decision-making, with special reference to herding behaviour, demographic factors, and Environmental, Social, and Governance (ESG) considerations. The study integrates insights from existing literature and primary survey responses to show how psychological biases, fear of missing out (FOMO), and demographic differences influence choices in financial markets. It also examines the increasing significance of ESG-based investing as investors seek ethical and sustainable avenues. The findings highlight that investment behaviour is shaped not only by financial data but also by emotions, cultural background, and social influence. The paper concludes that behavioural finance is critical for understanding real-world investor behaviour and recommends strategies for policymakers, advisors, and investors to mitigate irrationality in financial markets.
Copyright
Copyright © 2025 Dr.B.Girimurugan. This is an open access article distributed under the Creative Commons Attribution License.
