Preferred more than one investment avenues for small individual investor in Tirunelveli District

Behavioural finance is a relatively new paradigm of finance, which seeks to supplement the standard theories of finance by introducing behavioural aspects to the decision making process. Early proponents of behavioural finance are considered by some to be visionaries. This was the first time a psychologist was awarded the Nobel Prize and played a key role in convincing mainstream financial economists that investors can behave irrationally. It attempts to explain and increase the understanding of the reasoning patterns of investor, including the emotional processes involved and the degree to which they influence the decision making process. Essentially, it explain the what, why, and how of finance and investing. It endeavors to bridge the gap between neo-classical finance and cognitive psychology. It takes into account the individual investor’s decision making formula as well as his / her behaviour, which, in turn, sheds light on the observed departures from the traditional finance theory. Thus, behavioural finance is the application of scientific research on the psychological, social and emotional contributions to market participants and market price trends.