Abstract:

In real life, people rarely take investment decisions in a fully rational way. Many studies over the years suggest that emotions, personal mindset, past experiences, and even the people around us push and pull our money choices in different directions. This paper looks at how human behaviour affects investment decisions in India, especially now that retail investors are entering the market in very large numbers. The study is based only on secondary data taken from trusted sources such as SEBI reports, NSE and BSE statistics, NSDL and CDSL depository data, RBI publications, AMFI updates, SBI Research reports and earlier peer-reviewed research papers. The data covers the period from 2019 to 2025, with the main focus on the post-COVID phase, since this is when retail participation in Indian markets really exploded. Behavioural finance concepts such as overconfidence, loss aversion, herding, anchoring, gambler’s fallacy and regret aversion are discussed along with real numbers from the Indian market. The findings show that, even though many more people are investing today, a large number of them are still losing money. In many cases, this happens not because of a bad market, but because of small mental shortcuts and emotional reactions that investors are not even aware of. SEBI’s own data, for example, shows that around 91% of individual F&O traders ended up with net losses. The paper ends with a few practical suggestions for investors, financial advisors and regulators that can help in reducing the harm caused by such behavioural biases.

Keywords:

Investment Behaviour, Behavioural Finance, Cognitive Biases, Retail Investors, Secondary Data, Decision-Making

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