Successful investing is nothing but being a master of one’s own emotions. One of my favourite quotes is by Peter Lynch: “Success depends on the ability to ignore the worries of the world, long enough to allow your stocks to compound”. Unfortunately, the world around us constantly batters us with noise and news. As a result, the investor is often worried and emotional, ending up making bad decisions. Here is where an understanding of behavioural science based investing can help an investor navigate the choppy waters of investing.

What is Behavioural Science Based Investing?

Behavioural science is simply the amalgamation of various subjects such as economics, brain science, human psychology, social studies and economics, but with a focus on how human beings react under various situations. The most important outcome of this is the understanding of the motivations behind decisions.

Since we operate under various influences, the cross-disciplinary nature of behavioral sciences helps identify them and determine which ones are at play. There are dozens of patterns of such influences, often termed as cognitive biases or emotional biases.

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