Question

In what ways are individual investors not rational?

Answer 1

Rational Investor is a action or decision making criteria of person by which he get optimum benefit from investment made by them .

Following types of individuals are not rational investors :

1. individual having overconfidence , some investor who see their portfolio rising for extended period they not consider the previous down market in their over confidence and they make wrong decision

2. The individuals who are affected by other's advise or news

3. The individuals who get panic from down market and sell their stock at any price available that time

4. The individuals having fear of losing money greater than they make money.

5. The individual who bifurcate their investment in diffrent bucket and treat the each bucket as separate investment

6. The individuals who make the investment in shor term investment plan to achieve their long term needs.