Behavioral aspects of investing in financial markets

Abstract

Financial markets are created and managed by people. Appropriate understanding of human behavior in certain situations can affect more accurate investment decisions. The main factors that affect investors are fear and greed. They occur in different conditions and lead to different human errors. Other errors result from too much self-confidence, cognitive errors or bad view of the market. Appropriate psychological preparation of the investor affects its greater eficiency and helps it to bypass many problems. In case of absence of mental preparation for investing, all other elements will not be able to function properly and their effectiveness will be significantly reduced, and can lead to weaker financial results.