For individual investors deciding upon an investment strategy involves self evaluation of aversion to risk, social responsibility, and desired returns. Traditional economic theories proclaim individuals are rational creatures who make investment decisions unemotionally to obtain a desired portfolio performance. Recent economists have challenged these foundational theories by proposing that the decision making process for individuals includes abstract factors of emotions and behavioral ripostes. Through research and surveying individuals from varying demographics, the effect of different emotionally states on investment strategies can be examined. The hypothesis states that younger or less investment educated individuals are more susceptible to emotionally-driven investment decisions than older more experienced investors. The results show these demographics do have differing effects on individuals' investment strategies.
Bibliography : pages 75-76