A SYSTEMATIC REVIEW ON APPLICABILITY OF BEHAVIOURAL FINANCE IN INDIVIDUAL INVESTMENT DECISIONS

According to traditional finance investors are rational and logical and they consider all available information in portfolio of their investment process is the main assumption of standard finance and this applies by Effective Market Speculation (EMH), being an important concept of traditional finance. With respect to traditional theory of finance there are two key aspects: i) Agents in the market are seen to be completely rational (ii) Markets are seen to be Efficient. Over the past decades this assumptions has been challenged by the professionals and Psychologists they're saying that investors can‟t be sensible as their decisions are controlled by psychological errors. These errors lead in improving a new field of economical overall costs, known as Behavior Finance. Behavior finance opinions how various psychological features change the way investors make their financial commitment options. In the present research paper, 65 studies have been reviewed, on the theme of Behavioural Finance and its role and importance in the investment decisions of individual‟s towards the end, a synthesis of reviewed work has also been attempted.