It challenges the traditional assumption of rational decision-making in economics by examining why and how people make irrational financial choices. that #FF11 Behavioral finance explores how psychology affects investor decisions.
The Power of Loss Aversion-
Did you know that people tend to fear losses more than they value gains?
This is known as loss aversion, a key concept in behavioral finance. Let’s dive into the numbers!
Studies show that losses are psychologically twice as powerful as gains.
Fact: A study by Nobel Prize winners Daniel Kahneman and Amos Tversky found that the pain of losing $100 is roughly equivalent to the joy of gaining $200.
Insight: This bias can lead to irrational financial decisions, like holding onto losing investments for too long or avoiding risky, yet potentially rewarding, opportunities.
Stay tuned with hashtag#financialfridays11 for more insights into your financial behavior.
How do you handle losses? Share your thoughts in the comments!
*Source: Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica.
#FF11 Big News for Brokers: SEBI Considers Allowing Investments in Non-Securities Businesses hashtag
SEBI is exploring ways for stockbrokers to invest their surplus funds in businesses beyond securities and commodities. This could be a game-changer for the broking industry, opening doors to exciting new ventures in fintech, technology, and even real estate. Here’s the lowdown:— Current regulations: Existing rules prohibit brokers from engaging in non-core businesses.— SEBI’s proposal: Two options are being considered:— Investing through a separate holding company: This would create a clear separation between broking activities and other investments.— Paying dividends and using the proceeds: This approach would be simpler but