Abstract:

Behaviour finance is a new approach to financial markets that has emerged at least in part, in response to the difficulties faced by the traditional paradigm. In broad terms, it argues that some financial phenomena can be betterunderstood using models in which some agents are not fully rational. More specifically, it analyzes what happens when we relax one, or both of the two tenets that underline individual rationality In some behavioural finance models, agents fail to update their beliefs correctly. In other models, agents apply Bayes' law properly but make choices that are normatively questionable, in that they are incompatible with some factors. Behavioural finance related to the psychology of investors and its impact in taking financial decisions. As we, all know that humans are social animals and they have emotions, which influence their decisions. The decisions, which are influenced by their behaviour, lead to inefficient and irrational decisions. It involves a field that studies how psychological factors affect decision making under uncertain conditions. Through this research, we came to know about the mentality of housewives while they invest in various investment avenues. Through this, we also came to know that their investment decisions are not only being influenced from the traditional methods of the investment but also from the psychological factors. The relevance is tested particularly in the COVID- 19 pandemic situation. We used both primary and secondary methods to know the effects of behavioural finance on housewives and to study the impact and relevance of behavioural financing in the investment decision of housewives.

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