What is behavioral finance
Behavioral finance is a field of study that combines psychology and economics to understand why people make financial decisions that deviate from rational behavior.
Behavioral finance is a field of study that combines psychology and economics to understand why people make financial decisions that deviate from rational behavior.
Behavioral finance developed in part in response to the efficient market hypothesis. It is a popular theory that the stock market moves rationally and predictably. Stocks generally trade at their fair price, and these prices reflect all available information available to everyone. You can't beat the market, because everything you know has already or will soon be reflected in market prices.