How Your Behaviour Affects Investments

Behavioural science can tell you the future of your wealth. As you welcome the New Year, you must focus on your investment beliefs, preferences and social interaction tendencies.

- Rajas Kelkar (The author is editor-in-chief at www.moneyminute.in)

They affect your decision-making ability. For example, a study of investors in the United States cited in the latest National Stock Exchange bulletin highlights neuroticism as a trait affecting investment decisions.

Your emotions determine the course of your actions. Negative emotions can gather pace almost immediately after you suffer losses. That could be a factor in the bad timing of entering the market. However, you may keep hanging on to those negative emotions longer than required.