Investment

Character of behaviour finance in personal investment decision

Introduction

Investment is the process of purchasing fixer assets in order to increase capacity. Some people may ask: why we want to invest? Businesses need to invest to grown, they might want to increase capacity so they can produce more. If they produce more and they can sell more and increase sales revenue. Therefore, investment decision has been draw into the business. Investment decisions are made by investors and investment managers. Many outstanding managers are trained to make correct decisions and lead the company to the right direction. This sounds easy, but it is difficult to achieve in the complicated business environment. They are estimating and choosing a particular case or decision from a large number of alternatives for the company. They need to be proficient in many areas so that they can achieve the goals or profits that they have predicted before. So they need sensitive perception, good understanding of the existing environment and professional knowledge and skills to make the best choice of investment. For instance, if you want to make profit in stock market, you need to know the environment of the market, some risks of playing stocks and how to avoid these risks. If you choose a particular stock, you need to know the recent development of the stock’s company and the future performance in order to affect the price and trend of the stock. It is a large amount of information you need to deal with.

Nowadays, behavioural finance is utilized into investment decision. It is the study of how psychology affects financial making and financial markets. Managers can decrease some risks and avoid some misjudgments that people have made before by learning behavioural finance. It is a indispensable component in today’s decision making process because it can help managers to make a clear and beneficial investment decision for the company.

Analyse of investment decision

Investment...