Investment Pattern and Behaviour of Investors in Capital Market

Investments are made with an avowed objective of maximizing the wealth. Investors need to make rational decisions for maximizing their returns based on the information available by taking judgments free from emotions. Investors’ behavior is characterized by overexcitement and over reaction in both rising and falling stock markets. Behavioral finance, a new paradigm of finance, which seeks to supplement the standard theories of finance by introducing behavioral aspects to the decision making process. It acquires importance since; decisions are not guided by rationality or prudence, but the emotions, greed and insufficient knowledge in capital market operations in the highly overloaded information environment. This paper investigates how investor interprets and acts on information to make informed investment decisions of investors with reference to Hyderabad city.