A research on behavioural biases in investment decisions

As a result of inability of traditional finance theorems, that is based on the hypothesis that individuals behave and decides rationally by paying attention to all available information on the phase of decision-making, to explain investor behaviors, behavioral finance theorems have been developed. According to behavioral finance theorems, investors cannot always behave logically and make rational decisions. On their investment decisions, they take decisions by acting under their emotions and psychological prejudices. Behavioral finance makes use of cognitive psychology to analyze under what misconceptions investors decide during their decision-making phase and how investors use decision-making mechanisms. The assumption that investors behave under their psychological misconceptions during their investment decision making phase and the decision making under the influence of investors' cognitive and emotional biases have constituted the frame of behavioral finance models. The purpose of this study is to examine the effects of behavioral prejudices on professional and individual investors in their investment decisions and to assess the findings of the questionnaire survey. Keywords: Behavioral Finance, Investor Psychology, Individual Investor, Professional Investor.