Psychology is a factor in the development as a successful investor.
Investor sentiment can and frequently drives market performance in directions at odds with fundamentals.
Behavioural finance proposes psychology-based theories to explain stock market anomalies, such as severe rises or falls in stock price.
The purpose is to identify and understand why people make certain financial choices.
Within behavioural finance, it is assumed the information structure and the characteristics of market participants systematically influence individuals' investment decisions as well as market outcomes.
