How do biases affect the financial decision-making of young investors?

Abstract

This research studies the impact of behavioral biases on the financial decision making of young investors between the age of 18-30. With the help of quantitative and qualitative data we have attempted to examine how biases such as overconfidence, herd behavior, and recency bias influence investment choices. Preliminary findings indicate that almost 70% of the respondents within the aforementioned age group actively invest and many are swayed by emotional factors and social influences. The study aims to highlight the prevalence of such biases, evaluate the effects of financial literacy on bias suppression and explore the role of psychological and emotional factors in creating market anomalies and inefficiencies.