Behavioural Biases and Stock Market Investment Decisions: Evidence from Young Investors in Maharashtra

Abstract

Traditional financial theories assume that investors make rational decisions based on available information and expected returns. However, behavioural finance research suggests that psychological biases often influence investment decisions. This study examines the impact of behavioural biases on stock market investment decisions among young investors in Maharashtra. The research focuses on key behavioural biases such as overconfidence, herd behaviour, loss aversion, and anchoring bias. Primary data were collected from 360 respondents aged between 20 and 35 years through structured questionnaires. Statistical tools including descriptive statistics, correlation analysis, regression analysis, and ANOVA were used to analyse the data. The results indicate that behavioural biases significantly influence investment decision-making. Overconfidence and herd behaviour were found to be the most influential biases affecting trading behaviour among young investors. The findings highlight the importance of financial education and behavioural awareness in improving investment decision-making.