Behavioral Literature studies in abroad (other than India) focuses only on Stock market investments.
But Studies in India focuses on Investor preference rather than behavioral factors.
Is there any theoretical background that behavioral studies works well only in stock markets alone?
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Kindly give your opinion. Thanks for spending your valuable time.
Much of behavioral finance revolves around choice. Stocks are often used for ease of data access. I research primarily in real estate finance and we often use consumer choice models. Loss Aversion, Signalling, Anchoring and over-optimism are a few widely used behavioral models that have wide application. Searches on those terms will find numerous articles. The models, although often derived in public markets, are human behaviors applicable to a wide number of investment choices.
An Empirical Analysis On Perception of Investors’ Towards Various Investment Avenues. This article covered all the investment alternatives. Majority of the studies focused on factors affecting the investment decisions. Various statistical tools were used to find out the behavioral factors. All the best.
Dear Researcher, there are some studies based on investor behaviour with reference to investment avenues also. In my opinion, investors in stock markets have altogether different behaviour than investors in other avenues like Mutual funds, Banks etc. therefore, most of the studies so far have focused on stock alone.
Behavioral Finance is grounded in the Economic Theory of Choice under Uncertainty. This theory is applicable to any markets where financial assets are traded. It can be the stock markets, the bond markets, the derivative markets,.. etc. Most studies have focused on the stock markets because stock markets are more accessible, easier to understand and most talked about. Investor preferences are one factor of behavioral factors which are fully taken into account in the Economic Theory of Choice under Uncertainty.
Thank you Mr.Ako Doffou . What is your opinion on using it for bank and other investments like real estate, gold, etc?
Stock markets are used because not only that the figures there are market driven and determined irrespective of the noise in the market, the figures are verifiable. That is the main reason behind crowd use of stock market in such scenarios. Hope I satisfy you?
Well said Mr.Jimmie Lenz. Intellectual information indeed. Thanks a lot.
Riyaz Ahmed, research is driven by availability of data. Without data the most brilliant and noble topic will be left hanging. Remember that stock markets are well organized around the world. This makes data on stock information easily available and hence contribute to the enormous studies on stock markets.