Behavioural finance and the role of investment advice
Advisors act as a sounding board, offering a rational perspective when investors are tempted to make impulsive decisions. Photo: Shutterstock.com
In the intricate and often unpredictable world of investment, the intersection of psychology and finance, known as behavioural finance, explains why investors frequently make irrational decisions.Traditional financial theories assume that investors are rational, always acting in their best economic interest based on available information. However, behavioural finance reveals that cognitive biases, emotions and social influences...