Paper Title
Role of Behavioral Finance in Portfolio Investment Decisions in India

Abstract
Extreme volatility has plagued financial markets worldwide since 1991 in India and worldwide almost on the same time. Investor sentiment has been one of the key determinants of market movements. In this context, studying the role played by emotions like fear, greed and anticipation, in shaping up investment decisions seemed very important. Traditional theories has failed many times to explain the behaviour of stock market and therefore Behavioral Finance is an evolving field that studies how psychological factors affect decision making under risk and uncertainty. This research paper seeks to find the influence of certain identified behavioral finance concepts (or biases), namely, Overconfidence, Representativeness, Herding, Anchoring, Cognitive Dissonance, Regret Aversion, Gamblers’ Fallacy, Mental Accounting, and Hindsight Bias, on the decision making process of individual investors in the Indian Stock Market. Primary data for analysis was gathered by distributing a structured questionnaire among investors who were categorized as (i) young, and (ii) experienced. Results obtained by analyzing a sample of 92 respondents, out of which 53 admitted to having suffered a loss of at least 35% because of the crisis, revealed that the degree of exposure to the biases separated the behavioral pattern of young and experienced investors. Gamblers’ Fallacy, Anchoring and Hindsight biases were seen to affect the inexperienced investors significantly more than experienced investors. Keywords - Behavioral Finance, Gamblers’ Fallacy, Anchoring, Hindsight Bias, Herding Bias